On
Sunday, the country's top legislature authorized the roll out of the new IPO registration mechanism to complete the amendment of the Securities Law. In
a statement by the China Securities Regulatory Commission, officials
said the legislative approval of launching the registration-based IPO system
marked significant development to the Chinese capital market and implements an
important measure to allow the market force to determine the allocation of
resources. It is not merely about delegating the IPO approval power to the stock
exchanges but a major transformation of the regulator's role, the
registration-based IPO system will emphasize the information disclosure rather
than corporate prospect and profitability. The regulator said that it will no
longer endorse the value of prospective companies under the new system but it
will still control the pace and pricing of IPOs to maintain market stability.
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