China's securities authorities have pledged to improve transparency and efficiency in appraising listing applications and invite more outsiders to participate in the evaluation process.
According to sources from the annual meeting of the listing committee of the China Securities Regulatory Commission (CSRC), the securities watchdog will strengthen inner controls during the appraisal of both IPOs (initial public offerings) and new share issues by listed firms and will draw up new guidelines regarding the matter.
Members of the listing committee, who evaluate the listing applications and vote on whether to approve the listing, suggested that the assessment procedures should be further simplified and clarified.
First formed in September 1999, the committee will be re-elected in September this year, when the two-year term of duty will have come to an end.
By then, the committee will be inviting more public participation to ensure the transparency and fairness of the assessment process, said CSRC Chairman Zhou Xiaochuan.
Presently, the committee has 80 members, all required not to take any position in listed companies to ensure impartiality.
Only 22 per cent of the members are CSRC officials; the rest are mostly renowned securities experts from the outside, CSRC sources said.
Last year, the listing committee held more than 100 meetings to assess 228 IPOs and 299 new share issuing applications.
Five IPO applications were rejected as they failed to meet the listing standard, 149 acquired approval and 145 were launched last year.
Zhou said there would be more IPOs on China's stock markets this year as the 10-year-old IPO quota system will be scrapped in March.
This will put an end to harsh competition for the limited IPO quotas allocated to each local government every year, which blocked the growth of many well-performing large-scale enterprises and private firms, said Wu Xiaoqiu, director of the Finance and Securities Institute of Renmin University in Beijing.
Reform of the listing regulatory framework will make the listing procedure more market-oriented, said Wu.
Reduction of administrative interference will enable more quality enterprises to enter the stock market, said Wei Jie, a professor with Tsinghua University.
"More transparency in market entry admission will greatly improve the general performance of listed firms in China," he said.
(China Daily 02/09/01)
