Brokers

China Watchdog to Toughen Up on IPOs, Listed Firms, and Brokers

(Yicai) March 15 — China’s securities regulator issued new policies to tighten oversight of initial public offerings and publicly traded companies as well as brokerages and fund managers as part of efforts to restore confidence in the country’s languishing stock market.

Li Chao, vice chairman of the China Securities Regulatory Commission, published four policy documents today setting out measures targeting IPOs and emphasizing strict control over the quality of applicants seeking to go public.

The measures also aim to ensure proper information disclosure by listed companies and their shareholders, as well as curbing excessive fundraising. 

The CSRC proposed 18 policies and measures for listed firms, which also include stricter accountability for financial fraud, false statements, deliberate hiding of business problems, and publicity stunts. 

Another priority is corporate dividends. Supervision will be tightened for listed firms that have not paid dividends for many years or have disbursed relatively low amounts. These firms are encouraged to pay out multiple times a year, especially ahead of the lunar new year holiday, so as to boost investors’ sense of gain.  

The regulator also introduced 25 policies on the regulation of brokerages and fund managers, which include strengthening management of shareholders and tougher requirements for appointing senior executives. 

As for its own self-regulation, the CSRC said it will increase consciousness of risks and responsibilities among officials, along with efforts to eliminate corruption. 

Editor: Tom Litting

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