China tightens scrutiny over IPOs, listed firms to revive stock market
China published a set of rules on Friday that would tighten scrutiny over stock listings, public companies and underwriters, as regulators ramp up efforts to revive investor confidence.
Regulators will vet initial public offerings (IPOs) more closely, crack down hard on securities fraud, and encourage listed firms to increase dividend payouts and buy back shares.
The goal is to make China's capital market «safe, regulated, transparent, open, vivid and resilient,» Li Chao, vice chairman of the China Securities Regulatory Commission (CSRC), told a press conference in Beijing.
China's stock market has rebounded from five-year lows hit in early February, after Beijing appointed veteran regulator Wu Qing as new CSRC chairman.
Under Wu, the watchdog has taken a series of market-friendly measures, including tighter regulation over computer-driven «quant» funds and fresh curbs on short-selling.
The CSRC, which has already slowed the pace of public share sales, said on Friday it will further strengthen supervisions of company listings.
IPO applications will be strictly vetted to prevent companies from excessive fundraising, while accounting fraud and false statements will be severely punished, according to the rules.
In addition, the CSRC will adopt «counter-cyclical adjustment» in the IPO market to take into account supply and demand in the secondary market, and will also boost onsite inspections on listing candidates.
China's benchmark CSI 300 Index is up 4% this year but is still 40% down from a peak hit in 2021,
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