CSRC unveils new batch of IPO reform measures

China's securities authority unveiled Monday the first major batch of policies for the country's reform of its IPO system.

The new policies made clear that established shareholders of a company can sell their shares when the firm launches an IPO, as long as they have been holding the shares for over 36 months, according to a statement posted by the China Securities Regulatory Commission (CSRC) on its website.

The commission also said that companies should determine the number of new shares to be issued in accordance with the capital they need, and they should decide on a mechanism to adjust the number of newly issued shares.

Media reports said that the requirement is in accordance with the general practice in other mature capital markets, and the move could help to increase the number of shares in circulation when a company launches an IPO and could make IPO prices more reasonable and market-based.

The CSRC unveiled other reform plans for the IPO system on Saturday. The plans were released about two weeks after a reform roadmap unveiled by the Communist Party of China Central Committee, which promised to introduce a registration-based system.

The CSRC said in a statement that the plan would be market-oriented and law-based, and would emphasize information disclosure.