Regulator to restart reviews of IPOs

Chinese stocks saw a sharp drop on Monday after the securities regulator said it will resume reviewing IPO applications following an 18-month moratorium.

The Shanghai Composite Index lost 1.6 percent before closing at 2003.49, in its largest fall since March 10. The Shenzhen Component Index dropped 1.14 percent to 7240.46. The ChiNext index of small-cap shares dropped 2.7 percent to 1257.26, the lowest level this year.

The sell-off began as investors learned that the issuance examination committee of the China Securities Regulatory Commission, the market watchdog, will start reviewing IPO applications on Wednesday. It had stopped reviews in October 2012 to remake rules and strengthen regulations.