China's Ant Group IPO debacle triggers tougher scrutiny of new listings


The abrupt suspension of fintech giant Ant Group Co. Ltd.’s record-breaking IPO in November has fueled debate about the shortcomings of the new system for evaluating and approving listings on Chinese mainland stock markets. It’s also accelerated a shift that was already underway to tighten supervision over IPO applications.

The registration-based IPO system, which had been under discussion for years, was introduced last year for listings on Shanghai’s new Nasdaq-style science and technology innovation board, the STAR Market, and was rolled out to Shenzhen’s ChiNext exchange for startups, in August. The aim was to bring China’s stock markets into line with international practice and allow companies to list through a registration process rather than a tortuous regulatory approval process that was prone to corruption and overly tight control by financial watchdogs.

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