Revisions will end CSRC approval of IPOs

A draft amendment to the Securities Law may end the authority of the China Securities Regulatory Commission to review and approve new share issues.

The amendment received an initial review on Monday by the Standing Committee of the National People's Congress, the top legislature, which is holding its bimonthly session.

The amendment would lead to the dissolution of the stock issue examination committee of the CSRC. Instead, share issues would be reviewed by the nation's stock exchanges.

The change would strengthen the market's role in distributing resources, said Wu Xiaoling, deputy head of the NPC Financial and Economic Affairs Committee.

The draft amendment also called for increased corporate disclosure regulations, innovation in the securities sector and tougher investor protection.

The draft also has provisions that:

・ Cover the issue and trading of asset-backed securities, as well as the listing and trading of government bonds and certain investment funds.

・ Require those involved in the securities industry to file reports on their own and their spouses' investments. The provision would cover employees in the securities industry, the staff of exchanges and depository and clearing institutions, the staff in the securities regulatory department of the State Council and employees in other securities-related sectors.

・ Abolish certain financial requirements for new share issuers, including a profit track record.

・ Permit the formation of "securities partnership companies".

・ Require that those wishing to establish securities companies or securities partnerships get the approval of the securities supervision and administrative department of the State Council.