March 29, 2019 / 8:05 AM / 25 days ago

China securities regulator says IPO reform could be expanded

FILE PHOTO: FILE PHOTO: An investor looks at an electronic board showing stock information at a brokerage house in Shanghai, China September 7, 2018. REUTERS/Aly Song/File Photo/File Photo

BOAO, China (Reuters) - A top Chinese securities regulator said on Friday that a trial program to revamp the country’s initial public offering (IPO) mechanism will be expanded if successful.

China has applied a registration-based IPO system to Shanghai’s planned Nasdaq-style technology innovation board, marking a radical shift from the existing approval-based mechanism where applicants need to go through a lengthy vetting process before listing.

Companies can already submit applications to list on the new tech board, but trading has not started.

Li Chao, vice chairman of the China Securities Regulatory Commission (CSRC), told the annual Boao forum in southern Hainan that the IPO pilot scheme could lay the ground work for further reforms in China’s capital markets.

He added that if successful, the registration-based IPO system would be promoted.

Local media has reported that the Shenzhen Stock Exchange, which hosts the start-up board ChiNext, also hopes to introduce the registration-based IPO system, as it will face rising pressure from Shanghai’s tech board.

Reporting by Kevin Yao; Writing by Samuel Shen; Editing by Richard Borsuk

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