China encourages environmentally friendly IPOs

BEIJING - China's securities regulator said Wednesday it will continue support for energy saving and environmentally friendly firms that are in conformity with the nation's industrial development policies to launch IPOs and grow through effective use of the capital market.

China Securities Regulatory Commission (CSRC) said strategic emerging industries including energy saving and environmental protection are important in structural reform.

The CSRC has introduced measures including Shenzhen-Hong Kong Stock Connect to broaden financing channels and lower financing costs.

By the end of June 2016, a total of 70 energy-saving and environment protection firms were listed on the SME board of the Shenzhen Stock Exchange, while 59 have listed on ChiNext, China's NASDAQ-style board.

Under the current IPO system, new shares are subject to approval from the CSRC, which controls both timing and price.

China is transforming its IPO approval system into one based on registration, which will allow bourses to take over approvals and clear the backlog of companies waiting.

To protect the environment, Chinese central authorities on Tuesday issued guidelines on "red lines" that declare certain regions off-limits to polluting industries, which all regions must decide on before 2020.