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Chinese securities regulator launches new IPO reform

Chinese securities regulator launches new IPO reform

Updated: 2012-04-02 01:03


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BEIJING - The Chinese securities regulator announced here Sunday that it has started to seek opinions on proposed new rules on the initial public offering (IPO) system, in a move to solve high initial pricing and curb speculative trading.

China Securities Regulatory Commission (CSRC) said in a statement on its website that the reform aims to make the pricing of new shares reflect the real value of enterprises and protect investors' rights and interests.

The CSRC said it is considering increasing scrutiny of IPOs with higher price earning ratios than their listed industry peers, especially when it is more than 25 percent higher, and exposing possible risks to investors.

The CSRC is also planning to invite five to 10 individual investors to participate in the pricing procedure and sell more shares to institutional investors.

The regulator might also remove a three-month lock-up period for institutional investors that have bought new shares to increase the number of circulating shares in the market, according to the statement.

The CSRC has promised to boost supervision on IPO speculation and give more severe punishment over irregularities like disclosure of false financial information and price manipulation.

The new rules will be further improved after collecting opinions, and gradually implemented and adjusted according to market conditions, according to the CSRC.