Since the 18th national congress of the communist party of china, the IPO system of our country has been reformed and perfected. In November 2013, the CSRC issued Suggestions on further reform of the IPO system, it means a new round of reform has begun and the IPO work restart. Experts believe that the reform of IPO system in our country is moving effectively in the direction of marketization and legalization. The regulatory department will adhere to the basic principle——finance should provide services for Real Economy, and constantly promote the reform and innovation of the IPO system.
IPO Normalization is established
Since this year, the number of IPO enterprises reviewed by CSRC at around 42 in a month. According to the Wind database, as of August 28, there were 284 enterprises, while the number of enterprises did not pass up to 46, the passing rate is lower than last year.
Since last November,the IEC has been steadily digesting the quake lake at the pace of 10 per week. As of August 24, there were 608 enterprises, of which 46 had passed, and 562 had not passed. For the 562 enterprises, there were 525 normal enterprises waiting for review, and 37 enterprises were suspended.
Since this year, there are 312 new stock issued in SSE and SZSE. It hasbeen increased for 110.89 % on average.According to wind database, the number of IPO which rise to the ceiling in five consecutive days (excluding five days) are up to 38.
The insiders say, IPO normalized is established, it not only meets the demand of real economy, but also brings positive feedback to the secondary market: the market valuation structure tends to be more reasonable, and the arbitrage space will gradually disappear.
Market participants point out that, while the IPO is normalized, the regulatory department has strengthened supervision which is suitable for the current development of our stock market.
Adhering to the direction of marketization and legalization
Tian Lihui, head of the institute of financial development at nankai university, made a summary for the IPO system reform: in this year, we carried out the new stock market allocation system, retained the new issue inquiry system, perfected the suspension mechanism, prohibit securities companies to purchase new shares, and set up a purchase constraint mechanism online for investors. Besides that, it made an adjustment for the information disclosure requirements which strengthened the supervision in the course and afterwards, and made the market mechanism more effective in IPO system.
Tian Lihui pointed out that the CSRC vigorously promote enterprises public for financing which raise the proportion of direct financing the proportion of the innovation companies. It lay the foundations for the stock market long-term bullish and it is benefit for the entity economy development.
IPO reform has two highlight, firstly, the audit focus transfer from substantive judgments to authenticity and compliance of the IPO, this is a major transformation; second, the normalization of the IPO is the second major reform result of the IPO. Dong Dengxin, director of the Institute of Finance and Securities at Wuhan University of Science and Technology, said that, the establishment of compulsory withdrawal mechanisms for enterprise corporation made fake also indicate that the reform of IPO move effectivelyin the direction of marketization and legalization.
Chen Li, director of the Institute of Chuangcai Security, said that the reform of the IPO system gave more opportunities for investors participation. In terms of payment system, the new reform also attracted more investors to enter the IPO market.
At the same time, the IPO system reform focuses on how to protect investors rights, which suppressed the phenomenon of institutions price, private investors pay. Moreover, the pricing issue system is directly positive for small and medium investors. The lead underwriter can recommend 5 to 10 individual investors to participate in the off-line inquiry, the interests of small investors have been better reflected.
Further reform and innovation of issuing system
With regard to the next step of the IPO system reform, Tian Lihui believes that the first thing is to prevent theadventurism and promote the registration systemat the right time. We should not only consider the bearing capacity of the secondary market, but also consider the progress of legal construction. Secondly, we should punish illegal behavior, improve the system of relief andstrengthen law enforcement. Thirdly, we should adhere todelisting system strictly. The fourth is to strengthen the information disclosure system.
Dong Dengxin suggested that we can further promote the reform of the IPO system from four aspects in the future, the first aspect is to gradually cancel the IPO Pricing window, and abolish the administrative control of the IPO pricing; the second is to cancel the price limitation in the first trading day, and the third is to make investors both inside and outside the market can apply for new stock; the fourth is to connect to international stock market.
Chen Li that the strength of the withdrawal of the market will help prevent the issue of new shares academics, but also to IPO company performance is high, the sponsorship organization whitewash performance and other acts to form an effective deterrent.
Chen Li stressed that the delisting system is a guarantee for the quality of IPO and the interests of investors. In the long term, the great wave panning is conducive to the emergence of high-quality targets, which is benefit for the re-establishment of the stock market eco-environment.
