Drafted Rules to be Finalized for IPO Listings
The security regulator is finalizing drafted rules that will be used for initial public offering listing for this year. Regulators will be imposing a robust disclose requirement for firms by implementing rules that have become effective when market condition are appropriate. Based on the proposed registration based system applicants are required to disclose all information that is related to earnings and operations with company investors which decides the market worth.
The chairman for the China Securities Regulatory Commission Xiao Gang said that the implementation of the system if registration based share offering is used to safeguard the interest of investors. Furthermore Chinese laws are currently requiring companies that are planning listings must first get approval from the commission which in turn guide the offering price that is measured using the respective price to earnings ratio.
The new system will be implemented in 2015 after amendments to the Securities Act is finished, Xiao also said that no time frame have been set for the launch of the planned trading model that is said will allow financial products to be purchased and sold on the same day. As of the moment investors can sell shares a day after they have purchase the products.
China has resumed its initial public offering last January after undergoing a 14 month suspension with floating share of 45 firms which raised a total amount of 32 billion yuan. To support the resumption of the offering, the commission was launched a series of reforms in November but has pulled back to add more restrictions to further curb irregularities, which prompted firms to postpone their IPOs and later re-launched it after doing some adjustments.