China’s securities regulators to tight scrutiny over stock issuance, listed companies to support capital market
China’s securities regulators to tight scrutiny over stock issuance, listed companies to support capital market

China’s securities regulators to tight scrutiny over stock issuance, listed companies to support capital market

 

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China’s top securities regulator published a set of rules that would tighten scrutiny over stock listings, public companies and underwriters in a stepped-up effort to revive investor confidence and boost the sluggish capital market.

The rules detailed measures to strengthen the supervision of the process of getting listed and issuing stocks, intensify the oversight of listed company behaviors, enhance the expertise of securities firms and mutual fund companies, and crack down on any instances of misconduct and corruption among CSRC officials.

Regulators will vet initial public offerings (IPOs) more closely, crack down vigorously on fraud in stock issuance, and encourage listed companies to increase dividend payouts and buy back shares.

The regulator will raise the listing criteria of some market sections and implement more on-site inspections of at least one third of the IPO applicants, said Yan Bojin, head of the China Securities Regulatory Commission’s department of public offering supervision, said at a press conference in Beijing.

The CSRC will guide the Shanghai and Shenzhen bourses to moderately tighten the financial listing criteria of certain market sections so that companies of different development stages can get listed in suitable sections, he said.

Activities of fraudulent issuances and financial frauds detected in on-site inspections would be strictly punished, even if the companies withdraw their listing applications, Yan said.

The regulator will implement counter-cyclical adjustments to the issuance of new stocks in accordance to the secondary market’s capacity to absorb new shares, according to the rules.

The goal is to make China’s capital market “safe, regulated, transparent, open, vivid and resilient,” said Li Chao, vice chairman of the CSRC.

China’s stock market has rebounded from five-year lows hit in early February, after Beijing appointed veteran regulator Wu Qing as new CSRC chairman. Under Wu, the watchdog has taken a series of market-friendly measures, including tighter regulation over computer-driven “quant” funds and fresh curbs on short-selling.