SHANGHAI, Sept.17 -- Chinese investors are disappointed in the country's lukewarm stock market losing another potentially high-quality stock as e-commerce giant Alibaba prepares for a spectacular initial public offering in the U.S. on Friday.

Investors blame cumbersome rules, such as banning companies registered overseas from listing in China and retaining lengthy listing procedures, for forcing competitive domestic firms like Alibaba to list abroad.

Other notable companies listing abroad for similar reasons include instant messaging service provider Tencent, search engine giant Baidu and the country's top 10 Internet firms ranging from Sina to Sohu.

Qiu Yanying, an investment officer for China Fortune Securities Co. Ltd., said China will lose more innovative firms like Alibaba if it retains the approval-based stock regulation system, which selects IPO applicants based on records of financial data and restricts ownership structure in line with share proportions.

Alibaba on Monday raised its initial offering share price to 68 U.S. dollars and is on the verge of making the world's largest IPO on Friday.

Ni Zhengdong, CEO of finance firm Zero2IPO, said expatiatory listing regulations have consumed patience of many innovative entrepreneurs.

More than 200 companies are currently queueing for approval to be listed on Shenzhen's start-up board, which has ambitions to become China's Nasdaq-style board.

The Chinese securities regulator ended a 14-month IPO freeze in January, promising market-based reforms to revive one of the world's worst-performing stock markets. The long-term waiting has spurred a new wave of new IPOs, but the pace of approval is still slow.

"RMB venture capital funds are interested in investing in high-tech and innovation firms. However, the system's problem has blocked many such firms from entering the stock market, and makes it difficult to de-list bad apples," said Ni.

The company's venture capital market analysis showed Chinese and foreign venture capital institutions raised 199 funds in China last year, down by 21 percent year-on-year. The funds boast combined capital worth 6.9 billion dollars, down by 25.7 percent from the year-ago volume, representing the lowest since 2010.

The Standing Committee of the National People's Congress (NPC), China's top legislature, announced in April a plan to examine an amendment to the securities law in December of this year.

Xiao Gang, chairman of the China Securities Regulatory Commission, said the securities law should be aimed at protecting public investors' interest. It should focus on fostering and strengthening market mechanisms to stimulate market vitality.

Securities and legal experts cautioned some crucial steps must be taken, including building a "social credit system" to assess the behavior of citizens as well as companies and organizations, which can help maintain the market order once the system becomes market-oriented.