China Justice Observer

中司观察

EnglishArabicChinese (Simplified)DutchFrenchGermanHindiItalianJapaneseKoreanPortugueseRussianSpanishSwedishHebrewIndonesianVietnameseThaiTurkishMalay

China to Introduce Registration-Based IPO System in Securities Market

Mon, 06 Mar 2023
Categories: China Legal Trends

China has long adopted the approval-based initial public offering (IPO) system. The upcoming new policy will change the regulatory model of China’s securities market to a large extent.

In February 2023, China’s State Council approved the “Overall Implementation Plan for the Full Implementation of the Stock Issuance Registration System” (全面实行股票发行注册制总体实施方案, hereinafter the “Overall Plan”). On this basis, the China Securities Regulatory Commission (CSRC) released draft rules and regulations of the system, including the “Administrative Measures for Initial Public Offering Stock Registration” (首次公开发行股票注册管理办法) to solicit public opinion.

China has long adopted the approval-based IPO system, meaning companies are required to obtain authorization from the securities regulatory authority in order to go public. The company can only go public after the approval. Therefore, the regulatory authority plays a significant role in the company listing. In contrast, many countries, such as the United States, have adopted a registration-based system, which means regulatory authorities will set a standard for company listing. Companies can go public if they are up to the standard.

Under the approval-based system, China’s regulatory authority plays the role of goalkeeper, meaning more supervision occurs when companies go public. Under the registration-based system, supervision will occur more after a company goes public.

This change will significantly impact the regulation and investment approaches of China’s securities market.

 

 

Cover Photo by Zean Wu on Unsplash

 

Contributors: CJO Staff Contributors Team

Save as PDF

You might also like

China Enacts Criminal Law Amendment (XII)

In December 2023, China’s legislature, the National People's Congress, passed the Criminal Law Amendment (XII), which aims to increase the punishment for bribery.

China Releases Typical Cases of Illegal Forex Activities

In December 2023, China’s Supreme People’s Procuratorate (SPP) and the State Administration of Foreign Exchange (SAFE) jointly released eight typical cases of cracking down on illegal foreign exchange crimes, highlighting concealment methods, complex transactions, and dissemination of illicit information through social media.

China Releases Typical Cases of Private Fund Crimes

In December 2023, China's Supreme People's Court (SPC) and Supreme People's Procuratorate (SPP) jointly released five typical cases of private fund crimes, aiming to establish uniform standards for handling such crimes nationwide and combatting criminal activities within the private fund sector.

SPC Releases IP Guiding Cases

In December 2023, China’s Supreme People's Court issued its 39th batch of guiding cases focused on intellectual property rights, covering various aspects such as IPR infringement disputes, patent ownership, and copyright ownership.

SPC Releases Judicial Interpretation on Contract Law

In December 2023, China's Supreme People's Court issued a judicial interpretation on the Contract section of the Civil Code, aimed at guiding courts in adjudicating disputes and ensuring nationwide consistency in application.

China Introduces New Drunk Driving Convictions Standards Effective 2023

In December 2023, China announced updated standards for drunk driving convictions, stating that individuals who drive with a blood alcohol content (BAC) of 80mg/100ml or higher on a breath test may be held criminally liable, according to the recent joint announcement by the Supreme People's Court, Supreme People's Procuratorate, Ministry of Public Security, and Ministry of Justice.