China to raise transparency of share sales review
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E-mail Shanghai Daily, February 2, 2012
The China Securities Regulatory Commission yesterday started to implement a review process for initial public offerings to increase supervision transparency.
Companies that plan to launch IPOs on the main board, small and medium enterprise board and growth enterprise board have to go through 10 procedures before they get an approval from the regulator, the CSRC said in a briefing yesterday.
The procedures include Q&A meeting, feedback meeting, information disclosure and a public offering review meeting.
Each review decision is made after group discussions at the IPO review meeting, according to the CSRC which will update the companies' review status every week.
"We hope to further increase the transparency of the IPO review process by revealing such process to the public," said a spokesman from the Department of Public Offering Supervision at the CSRC.
Disclosing the IPO review process is part of the latest effort by the CSRC to strengthen regulation on securities trading.
"The CSRC has introduced various measures in recent years to make IPO review a more open and transparent process," the spokesman said.
For example, he said the authorities have made selecting members of the public offering review committee, which reviews IPO applications, more transparent.
The CSRC has also brought forward the time for an IPO prospectus to be disclosed from five days to one month before the public offering review meeting. This will help strengthen the legal responsibility as stated in the prospectus, and increase supervision of brokerages, he noted.
The spokesman also urged securities brokerages to fulfill their responsibilities properly when they help a company complete the IPO process as some of them had not disclosed risks sufficiently in the IPO prospectus.
CSRC chairman Guo Shuqing said in December that he bears "zero tolerance" to insider trading and vows to build a transparent, honest and credible capital market.
