Markets respond positively to IPO registration details

Responding to the release of detailed regulations for full implementation of the registration-based initial public offering mechanism throughout the A-share market later Friday, the benchmark Shanghai Composite Index rose 0.99 percent during the morning trading hours on Monday and the Shenzhen Component Index up 0.75 percent.

China Securities Regulatory Commission, the country's top securities watchdog, released 165 sets of detailed measures to completely adopt the registration-based stock issuance system across the A-share market. It was 16 days after the CSRC rolled out the draft version to solicit public opinions. The measures have taken effect immediately.

The new rules have streamlined listing requirements, abolished administrative restrictions on the price and size of IPOs, and removed the committees at the CSRC that were until now tasked to review and approve listings and listed companies' mergers and acquisitions.

Under the new institutional arrangement, the registration-based IPO mechanism will be implemented at the A-share main board, where a large number of large-cap companies are listed. Prior to that, the mechanism has been experimented at the STAR Market in Shanghai, the ChiNext in Shenzhen and the Beijing Stock Exchange.

According to the Shanghai and Shenzhen bourses, the transition period to link the former and new mechanisms will last from Feb 20 to March 3, when the exchanges will process the existing main board IPO, refinancing and restructuring applications based on the former practices.

Starting from March 4, the two exchanges will start to receive main board IPO applications according to the new measures.

By referring to the experimental experiences at the STAR Market or the ChiNext, the A-share market is likely to stage bullish performance this year and next year amid abundant capital inflow, said experts from Zhongtai Securities.

shijing@chinadaily.com.cn