CSRC takes IPO step forward

The country's securities regulator will work overtime this weekend receiving self-examination financial reports from companies in line to launch IPOs, an unusual decision some analysts say is a sign that the authority is preparing to restart IPO approval procedures.

Starting this year, the China Securities Regulatory Commission (CSRC) is for the first time requiring companies in the mainland IPO pipeline, as well as their listing sponsors and accounting partners, to conduct self-inspections to ensure that the financial information they disclose before a public float is "authentic, objective and accurate."

The CSRC stipulated that the self-inspection reports must be submitted by the end of March.

"Such an intensified scrutiny of IPO candidates is meant to eliminate malpractice during the IPO process and improve the IPO environment in the country," Dong Dengxin, director of the Financial Securities Institute at Wuhan University of Science and Technology, told the Global Times Sunday.

As the self-inspection deadline looms, some analysts say it is a sign that the authority will soon restart IPO approvals, which have been suspended since November last year.

And the Shanghai Securities News reported over the weekend that the CSRC is fully ready to check those reports, and has even ordered relevant departments to work overtime processing them this coming weekend.

Yao Gang, vice-chairman of the CSRC, disclosed to reporters earlier this month that the commission would consider restarting IPOs in April after it finishes checking financial statements from the companies currently in the pipeline for a public float.

According to statistics released Sunday by Wind, a financial information provider, a total of 841 companies are in line to launch IPOs.

"If the authority decides to give the green light to IPO approval soon, it will surely have a negative impact on the stock market, which has just stabilized and is still fragile," Zhou Yu, a financial expert at the Shanghai Academy of Social Sciences, told the Global Times Sunday.

Zhou noted that it would be "bad timing" to restart IPO approvals, especially considering the current weak economic conditions.

"If the economy were good, with adequate money in the stock markets, massive quantities of newly listed companies would not be harmful to the market as a whole," said Dong.

"Considering the current economic situation and the performance of the stock market, I don't think it is possible for the commission to allow IPOs very soon," Li Lei, an industry analyst with China Securities Co, told the Global Times Sunday, noting that the commission has just gotten a new boss, which means caution will be the main theme for a while.

The government moved Xiao Gang on March 17 from his position as chairman of the Bank of China, making him the new head of the CSRC to replace ambitious reformer Guo Shuqing.