Listing rules must conform to reality

It has been said that China's registration-based share listing system will launch before June 1. Although amendments to China's Securities Law have not appeared on the agenda for lawmakers, regulators still seem willing to carry out registration-based IPO reforms.

According to Yao Gang, vice chairman of the China Securities Regulatory Commission (CSRC), reform plans for a registration-based IPO system will be opened to public comment after they are submitted to the State Council. Without going through this procedure, reforms cannot be implemented.

After an executive meeting of the State Council last year, authorities announced their intention to accelerate - among other things - registration-based listing reforms. This will require significant reforms to systems that govern market distribution and oversight. In the near future, many believe IPOs will no longer require approval by the CSRC, although authorities have been far from definitive on this subject.

What matters is not so much who conducts the reviews, but what is reviewed and how it is reviewed. This is the key to changing China's share listing system from an approval-based system to a registration-based system. Only by facing reality can reforms be successfully realized.