China to switch on new IPO system in two years

China plans to launch a registration-based system for IPOs on the Shanghai and Shenzhen stock exchanges, shifting approval powers from the securities regulator to bourses.

China plans to launch a long-awaited registration-based system for initial public offerings on the Shanghai and Shenzhen stock exchanges in two years, shifting approval powers from the securities regulator to bourses, the State Council announced on Wednesday.

A regular meeting of China’s cabinet, chaired by premier Li Keqiang, on Wednesday passed a draft document to overhaul the country’s current approval-based IPO system, which heavily relies on stringent review by the securities watchdog.

The cabinet said it is awaiting approval from the National People’s Congress on the proposal as it involves adjustment of the current securities law, according to a statement posted on its website on Wednesday.

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