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Chinese regulator unveils improved IPO reform guidelines


12:15, April 29, 2012

BEIJING, April 28 (Xinhua) -- China's securities regulator on Saturday issued its final guidelines on new rules for the country's initial public offering (IPO) system after making several improvements according to feedback gathered from the public earlier this month.

The new guidelines are aimed at improving the accuracy of information disclosures and making initial pricing more reasonable, the China Securities Regulatory Commission (CSRC) said in a statement on its website.

The guidelines detail separate responsibilities for issuers, intermediary institutions, law offices, accounting firms and rating agencies, as well as dictate strict punishments for irregularities and illegal practices.

Issuers and underwriters may freely decide the offering time within the effective period following regulatory approval, according to the revised guidelines.

The CSRC will also allow underwriters to invite 5 to 10 individual investors to participate in pricing procedures.

It promised to introduce independent third parties to carry out risk evaluations regarding information disclosures by companies in order to give references to medium- and small-sized investors, according to the guidelines.

When price earning ratios go 25 percent higher than their listed industry peers, issuers should further analyze possible risks in order to disclose more information to investors.

Dismissing concerns about price controls on its part, the CSRC said the new rule gives time to market participants to consider whether their pricing is reasonable or not.

The regulator also removed a three-month lock-up period for institutional investors in a bid to boost the circulation of new shares in the market, according to the statement.


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