The abrupt suspension of fintech giant Ant Group’s record-breaking IPO in November has fueled debate about the shortcomings of the new system for evaluating and approving listings on Chinese mainland stock markets. It’s also accelerated a shift that was already underway to tighten supervision over IPO applications, reported Caixin.
Two IPO applications have recently been rejected outright by the STAR Market — one in September and one in November. Of the eight applications that have been suspended this year, three took place in November, including Ant Group. In November, ChiNextrejected an application from a Jiangsu-based software developer, the first such decision since the decade-old board revamped its listing regime in August to allow registration-based IPOs.
Companies seeking to float on the STAR Market and ChiNext board are facing tighter scrutiny of their listing documents as they go through the review process, Caixin sources said. One manager with an investment bank said that applicants are now getting far more inquiries than before from the Shanghai and Shenzhen stock exchanges and the bourses are conducting more onsite inspections.