Regulator 'studying' new share sale reform

Investors check stock prices at a securities brokerage in Haikou, Hainan province on March 8.[Photo/China News Service]

China's securities regulator is still studying reform of the registration-based system for initial public offerings, a senior securities official said on Tuesday without elaborating on the details or timetable.

Reform of the new share sale mechanism has been a closely followed topic during the ongoing annual sessions of the nation's legislators and political advisers.

"The regulator is studying the registration-based reform," Li Chao, vice-chairman of the China Securities Regulatory Commission, told reporters on the sidelines of the ongoing session of the National Committee of the Chinese People's Political Consultative Conference, the country's top political advisory body.

Li declined to offer further details, only stressing that his comments did not imply that the reform had been delayed.

Investors have been hoping to gain further insight through discussions and debates of senior officials during the meetings on one of the most important reforms of the Chinese stock market, which will lead to a shift from an approval-based system to a registration-based one for new share sales.

Surprisingly, officials have been reserved on commenting on details of the reform and have seemingly been placing greater emphasis on maintaining market stability.

Premier Li Keqiang did not mention the new share sale reform in his highly anticipated Government Work Report delivered on Saturday to deputies of the National People's Congress, sparking discussions that the government may delay the process.

Li Daokui, a CPPCC member and an economics professor at Tsinghua University, said that the absence of the registration-based reform in the report suggested a cautious attitude by the Chinese authorities on pushing financial market reform.

"China must proceed with financial reforms, but only in a prudent manner. Reforms are not supposed to be about meeting deadlines," Li said, adding that the registration-based IPO system should be launched when the conditions are right, and this first requires improvements in regulatory oversight.

Liu Qingfeng, chairman of software company IFLYTEK Co Ltd and an NPC deputy, said that China should create a system to allow data exchange among the various financial regulators to ensure effective oversight and the healthy development of the stock market.

China's top legislature has authorized the State Council, the nation's cabinet, to launch IPO reform before completing amendments to the Securities Law.

The authorization became effective on March 1 and will be valid for two years, meaning that the reform must be launched within that time frame.

Wu Xiaoling, deputy director of the Financial and Economic Affairs Committee of the NPC Standing Committee, said that the amendments to the Securities Law have been included in the main work of the top legislature this year.

On Tuesday, Chinese equities rose with the benchmark Shanghai Composite Index gaining 0.14 percent to close at 2,901.39 points.

Cheng Yingqi contributed to this story.