Out-Law News | 11 Jun 2014 | 11:06 am | 1 min. read
The China Securities Regulatory Commission (CSRC) has announced that it has given final approval to 10 firms to list IPOs on the Shanghai and Shenzhen stock exchanges, Reuters said.
According to the news agency, a suspension of IPO approvals on China's mainland began towards the end of 2012, but was never officially confirmed. This appeared to end in January and February this year, when the CSRC allowed around 50 companies to list. However there had been no listings and no clarification since then until the CSRC announced its approval for 10 new listings this week.
Prior to the reopening, the CSRC had said that it was aiming to transform the IPO market to a registration-based system similar to that deployed in the United States, said the news agency.
According to Caixin online, sources close to the regulator have said that the CSRC has told IPO candidate companies to promise not to raise more funds than their prospectuses aim for and to cap their offering price-to-earnings ratio at their industry's average level.
The regulator has also banned companies' original shareholders from selling their shares during an IPO, Caixin said, in what Caixin said was a reversal of a previous regulation which said shareholders could do so if it helped stabilize the price of new shares.
According to Caixin, IPO candidates which do not comply with these rules will not be able to pass the final stage of CSRC listings examination.