China’s Nasdaq-style ChiNext board is officially launching a widely expected trial of a registration-based initial public offering (IPO) system and allowing money-losing startups to list on the board, reported Caixin.
The China Securities Regulatory Commission (CSRC) and the Shenzhen Stock Exchange issued supporting rules Monday related to ChiNext’s move to a registration-based IPO mechanism and started soliciting public opinions on the rules.
A registration-based IPO mechanism is more market-oriented than the approval-based system, under which the CSRC vets every application, and approvals can take months or even years. Currently registration-based IPOs are allowed only on the Shanghai Stock Exchange’s high-tech STAR Market, a competitor to Shenzhen’s ChiNext.
ChiNext’s registration-based IPO system will largely be same as the STAR Market system, CSRC Vice Chairman Li Chao said Monday at a media briefing. The registration process consists of two parts: review by the exchange and registration with the CSRC, which decides whether to approve the registration within 20 business days, Li said.