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China to stabilise markets, adopt registration-based IPO system

by Mike Robinson

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© Reuters. FILE PHOTO : The China Securities Regulatory Commission, (CSRC) is seen waving the national Chinese flag outside its building on Financial Street in Beijing. It was taken July 9, 2021. REUTERS/Tingshu Wang

SHANGHAI, (Reuters) – Yi Huiman is the chairman of China’s securities regulator. He stated that China would stabilize and reform its capital market next year. The state-backed Xinhua News Agency published this report on Thursday.

Yi stated that China would reform its stock exchange next year in order to implement a registration-based IPO program. Currently, the Beijing Stock Exchange, ChiNext, and STAR Market are only adopting this system.

Yi stated that “the conditions necessary to use a comprehensive, registration-based IPO scheme are slowly being fulfilled.” Yi spoke with Xinhua. We are intensifying our efforts to create a comprehensive market-wide reform plan for the registration system… in order to make sure its smooth implementation.”

Yi stated that China would accelerate reforms of its offshore listing system, and will strengthen cooperation with international securities regulations.

In terms of regulation, the China Securities Regulatory Commission (CSRC) will step up scrutiny of fund raising and M&A activities in some sensitive areas, Yi told Xinhua.

He stated that China will attempt to mitigate debt default risks, and reduce their potential spillovers.

The global financial markets, concerned about wider contagion, are monitoring China Evergrande Group’s debt woes and the Chinese property sector worth $5 trillion.

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