China approves IPO reform proposal, new system could start by March

China’s top legislature on Sunday approved a proposal to revamp the country’s initial public offering (IPO) system, authorising the government to implement changes to the system that could be in place as early as March, the official Xinhua news agency said.

The State Council, or cabinet, had been awaiting approval on its plans to shift to a U.S.-style registration system for stock market floations.

In the latest reform aimed at developing China’s financial market, the changes are expected to help companies raise money more efficiently and reduce the involvement of regulators in the capital market.

The widely expected approval by the National People’s Congress, announced on Sunday, paves the way for regulators to draft detailed rules that will be implemented after seeking public feedback. Xinhua reported the approval on its official microblog.

The next step for the State Council is to come up with specific details of the new IPO system. The cabinet could do so and implement a new IPO mechanism as early as on March 1 next year, Xinhua reported. However, the state council has two years from March to do so.

The State Council said earlier this month it expects the new system to be implemented within two years.

The China Securities Regulatory Commission (CSRC) began speaking of moving away from its current approval-based system – seen as distorting the IPO market and encouraging official corruption – to a registration system, where the market decides who gets to list and for how much, in early 2014.

But the stock market crash that began in mid-June, blamed in part on an IPO glut hitting the market, put that process on hold as the CSRC froze new listings to stabilise a market that lost as much as 40 percent in just a few weeks.

After a pause of more than three months beginning in July, IPOs were finally allowed to resume over the past several weeks.

Although most market observers welcome the reforms as a needed step towards a fairer and more transparent listing process, investors have also raised concerns that a more streamlined process could result in a flood of new listings, pushing down stocks once again.

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.