China starts to implement registration-based IPO system

2023-03-20 09:31:32Global Times Editor : Li Yan ECNS App Download

China's registration-based IPO system is progressing at an accelerated pace, about one month after the country announced detailed mechanisms and regulations for institutional reform.

Industry observers said the first batch of companies under the new registration-based IPO program is likely to be listed in the main board as soon as early April.

A total of 16 companies had filed registration documents with the Shanghai Stock Exchange and Shenzhen Stock Exchange as of Thursday, according to disclosures by the two bourses. 

Separately, 10 companies' IPOs have been approved by the China Securities Regulatory Commission (CSRC), according to the website of the securities watchdog on Thursday.

Chen Li, chief economist of Chuancai Securities, told the Global Times on Sunday that the first batch of companies under the registration-based IPO plan is likely to be listed in early April.

"China is accelerating the pace to implement the registration-based IPO system, yet prudence is still a priority when it comes to the main board's listings," Chen said, adding that the first batch of companies to go public need to pay attention to their standardization in documents' preparation and disclosures.

"Instead of relaxing requirements on information disclosure, the system imposes stricter standards," Chen said.

Online distribution will also start soon. In order to ensure the smooth development of business related to the registration-based IPO program, the Shanghai Stock Exchange and the Shenzhen Stock Exchange organized the first network test on Saturday, together with China Securities Depository and Clearing Corp and China Securities Finance Co. 

The test was held to simulate processes of stock and depositary receipts trading at the Shanghai and Shenzhen stock exchanges, including entrusted declarations, transaction returns, market reception, and clearing and settlement, analysts say.  

The country's brokerage system is ready to kick off the registration-based IPO system, and will continue to find and solve problems during the testing process, according to the securities firms. 

China launched the new listing system on February 17, a milestone in the development of China's capital market reform.

The registration-based IPO system was previously practiced at the STAR board of the Shanghai bourse, the ChiNext market of the Shenzhen bourse, and the Beijing Stock Exchange.

"The biggest impact of the new registration system is that the market ecosystem has changed, and investors will pay more attention to the fundamentals of companies instead of seeking shell companies that are used to go public at minimal cost," Yang Delong, chief economist at Shenzhen-based First Seafront Fund Management Co, told the Global Times.

As more stocks will be listed, competition among the companies will become fiercer, and the survival of the fittest will be achieved, Yang said. 

China's stock market is the world's second-largest in market capitalization. In February, the number of stock market investors in China rose to more than 1.67 million, latest data from the China Securities Depository and Clearing Corp showed.


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