SHANGHAI (Reuters) - China's securities regulator plans to devolve some of its authority over approving initial public offerings (IPOs) to the Shanghai and Shenzhen Stock Exchanges around May, state media reported, another step towards a U.S.-style "registration" system for IPOs.
The Securities Times, a paper published by the Shenzhen Stock Exchange, reported on Friday that the China Securities Regulatory Commission (CSRC) would dissolve its Issuance Examination Committee, which approves IPOs and secondary offerings.
The CSRC would then allow the Shanghai Stock Exchange and the Shenzhen Stock Exchange to create "hearing committees"similar to those used in Hong Kong to vet new listings.
The report cited unnamed sources within the investment banking community. The CSRC had no comment on the report when contacted by Reuters.
According to the Securities Times article, the CSRC would retain ultimate authority to approve or reject share sales, enabling it to control the pace of new issuance and block IPOs it sees as dishonestly structured or otherwise unhealthy for the market.
China is working to shift from an approval-based system to a registration-based one in a bid to let market players play a bigger role in determining the timing and pricing of IPOs.
The adjustment could also be part of a wider anti-corruption campaign, as the high degree of control regulators have over who lists and when makes them natural targets for bribes and other forms of illegal persuasion.