(From Caixin Online)
Obstacles in legislature have regulator mulling slimmed-down reforms that would still allow for registration-based listings, source says
By Jiang Fei
The securities regulator is looking for ways to fast track the establishment of a registration-based initial public offering system because its original plan involving revising the law has suffered setback, a source with knowledge of the matter says.
The Standing Committee of the National People’s Congress – the body that runs the legislature between its full meetings – had been scheduled to read a draft amendment to the Securities Law in August that would have endorsed a registration-based IPO system, but that plan was shelved after the A-share market tumbled in mid-June.
The draft is unlikely move forward soon because of disagreements over many issues, the source said.
This has prompted officials from the China Securities Regulatory Commission (CSRC) to consider getting a legal basis for only the core elements of a registration-based IPO system, the source said.
Other issues, such harsher punishments for fraud, would wait until later, the person said.
This would still mean removing from current rules requirements regarding firms’ profits and revenue, ending the way the CSRC approves IPO plans and delegating more regulatory powers to stock exchanges.
The NPC’s top committee can do this by having the State Council adjust regulations that the law says IPO hopefuls must follow, the source said. The sources cited as a precedent the cabinet’s relaxation of regulations used inside the Shanghai Free Trade Zone, a pilot area for financial reform. Read more