The CSRC chairman's proposal to cancel the IPO review and approval process has sparked divisive debate among investors and shareholders.

Despite the slightly rebounds seen in the Shanghai and Shenzhen stock market, most investors remain concerned about the future of the financial markets in China.

Initial public offerings in China require approval by the China Securities Regulatory Commission, or CSRC. Now, the newly-appointed chairman of the commission, Guo Shuqing, is proposing to do away with the IPO review and approval process. That's attracted mixed responses from industry insiders.

One investor said: "I think it's necessary to implement the current IPO approval process, otherwise some low-quality shares may make their way onto the open market."

However, some investors agree that removing the IPO approval process is the correct step. They argue, the move will boost the long-term development of stock market.

Under the current system, the CSRC will post a copy of the draft prospectus on its website along with a date for when the IPO plan would be reviewed. Once a company has received regulatory approval, it must launch the IPO within six months. Analysts say this current process is a waste of time and funds.

One investor said: "The current IPO approval process tends to attract rent seekers, aggravating the depth and scope of the risks in the secondary markets."

Additionally, some investors highlight the money-making effect. They argue, stock market regulators should stop issuing new shares in the wake of the financial slowdown, and need not think too much about the IPO approval process.

Meanwhile, CSRC chairman Guo Shuqing says the commission will focus on improving the country's IPO mechanisms and transparency.