If you think about how much time Chinese policymakers put into creating a system that gives the market a bigger say in initial public offerings, you might wonder why regulators are suddenly taking a more hands-on approach to new listings.
The registration-based IPO system, which policymakers began promoting at least as far back as November 2013, was adopted by Shanghai's STAR Market in mid-2019, and by Shenzhen's ChiNext board earlier this year. The goal of the new system is to make the listing process more transparent and market-oriented than it is under the older approval-based IPO system. Under the latter, which is still used outside the STAR Market and ChiNext, companies are strictly screened. For example, they are required to show sustained profitability before they qualify for regulatory approval to go public. Under the new system, companies are allowed to list their shares as long as they disclose certain information about their businesses to investors
