China’s government has drafted rules for companies’ applications for initial public offerings to be reviewed by the country’s two stock exchanges, rather than regulators, the state-run Xinhua News Agency reported on Monday.
The proposed amendments to securities laws include removing some profitability requirements for companies planning IPOs, Xinhua reported on its microblog, citing rules submitted to the National People’s Congress standing committee.
Pushing forward a registration-based system for IPOs is the “most important” matter this year for the reform of China’s capital markets, China Securities Regulatory Commission Chairman Xiao Gang said in January. Planned changes would leave questions of IPO supply and timing of deals to companies, not regulators who now must approve most facets of an offering.
China currently relies on the CSRC to act as a gatekeeper for offerings. A seven-person listing review committee examines each application, judging factors such as investment potential and profit sustainability.