IPO Registration System Reform Will Speed Up And Is Expected To Land In March 2016.

The core of pushing forward the registration system reform is to straighten out the relationship between the market and the government.

The ingenuity of registration system is that it can solve the problems caused by information asymmetry between issuers and investors, regulate the boundary of regulatory departments, avoid excessive intervention by regulators, and no longer endorse the issuers, but pay more attention to past performance and future development prospects of enterprises. These are all judged and chosen by investors, and the number and price of shares issued by market players play a decisive role in the allocation of resources by the market.

At the same time, the regulatory authorities should concentrate their efforts on doing well the post supervision, maintaining market order and protecting the legitimate rights and interests of investors.

On the morning of 20 th, the chairman of the securities and Futures Commission, Huang Wei, assistant chairman of the securities and Futures Commission, and the leaders of the general office and the issuing department, listened to opinions on promoting the reform of the registration system of stock issuance.

Chairman Xiao pointed out: after the abnormal fluctuation of stock market, the revision of the securities law has been postponed. The State Council may adopt legal authorization to formulate opinions and solve it. We should go all out to register the system in March next year. We must first release the rhythm and then release the price. We will shorten the issuing process (3 to 6 months) and give the enterprise a clear expectation.

But on Sunday (November 22nd) after 5 p.m., some financial websites removed the news.

But up to now (22 o'clock at 12 o'clock in the evening), the SFC did not publicly declare the news.

The news remains to be confirmed.

But we know that the IPO registration system is an important reform project identified in the the third Plenary Session of the 18th CPC Central Committee "deepening reform decision", which will be launched sooner or later.

So what kind of impact will IPO registration reform have on China's stock market and China's economy?

1, the landing of IPO registration system is not only a top priority for China's stock market, but also a top priority for China's economy.

After its implementation, the power of issuing and listing shares is pferred from the government to the market and enterprises themselves, which will activate "public entrepreneurship and innovation" from the perspective of capital market.

Therefore, this is a great benefit for China's economy and a long-term good for the stock market.

2, the implementation of IPO registration system will bring an unprecedented tide of corporate listing.

Under the guidance of huge supply, the existing valuation system of Shenzhen and Shanghai stock market will collapse, because the "valuation bubble" brought about by the examination and approval system will break down.

3, in the process of IPO registration system reinventing the valuation system of China's stock market, gem stock is undoubtedly the first to bear the brunt. The price earnings ratio is 100% hard to maintain, and many stocks will be eighty percent off or seventy percent off.

The high value stock of small and medium-sized boards and boards also has a value regression process.

4, the IPO registration system is not only implemented in the main board and the growth enterprise market, but in fact it has been implemented on the new three boards, so the new three boards can only list more than 4000 enterprises in just 2 years.

It is predicted that there will be more than 1 new listed companies in 2016.

In the future, the speed of listing of Shenzhen and Shanghai stock market companies is much more difficult than that of the new three boards.

In this way, the average price earnings ratio will continue to decline, which will be the basic trend of China's capital market in the next few years.

5, starting in 2016, China's 5 level capital markets are all registered.

The so-called 5 levels are: Shenzhen and Shanghai motherboards, gem, new three boards, equity trading centers all over the country, and public funding.

This means that massive tradable equity will emerge on various trading platforms.

This will have a huge diversion effect on the capital of the main board market.

6, due to IPO

After the reform, there will be a large number of listed companies. A considerable number of companies will enter the zombie state of stock trading, and the delisting enterprises will also greatly increase.

In this way, the risk of retail speculation will be greatly increased.

Therefore, the market will become more and more unsuitable for retail investors.

The future stock market is the era of institutional investors.

7, in the past, as long as you didn't borrow money or invest in stocks, no matter how stocks fell, you could still have residual assets.

In the future, as the probability of delisting increases, if we do not borrow money, we may also return assets to zero.

8, for the regulatory authorities, after the IPO registration system, the key links of supervision shifted from "ex ante" to "affair" and "afterwards".

The job is more difficult and the consequences of corruption may be even more alarming.

9, for the listed companies, the listing threshold is greatly reduced.

The core competitiveness of enterprises is no longer reflected in the relationship with the government, but more on intellectual property, management and talent.

This is the gospel of China, the gospel of real entrepreneurs and the gospel of investors.

In the future, more and more enterprises will emerge in China's stock market.

10, the implementation of IPO registration system also has an inhibitory effect on high housing prices.

The reason why housing prices are so high in China is that there is a lack of credit in the capital market and financial investment field, and companies are making false statements.

In this year's stock market crash, the "stock crafty" plundering the middle class wealth is a vivid case, so a lot of money can only be found in the real estate market, because the house is visible and touching.

If future stocks are cheap enough and the market is sufficiently standardized, hedge funds in the property market will automatically flow out.

What is registration system?

The following is quoted by Xiao Gang, chairman of the securities and Futures Commission, in the speech of the 2015 national securities and futures supervision Conference on IPO registration system.

Since March 2000, the approval system has been adopted in China's stock issuance.

Over the past decade, nearly 1700 companies have been approved for initial public offerings. Listed companies have raised 5 trillion and 310 billion yuan in capital and played an important role in promoting capital formation. From 2006 to the end of September 2014, listed companies accumulated a cash dividend of 2 trillion and 970 billion yuan to investors.

In 2013, listed companies accounted for 47.56% of GDP revenue, accounting for 21% of the total tax revenue.

In the development of national economy, the status is becoming more and more important.

However, with the deepening of reform and the development of the market, the defects and deficiencies of the approval system gradually appear:

First, the SFC checks and checks, objectively forming the "endorsement" function of the government on the profitability and investment value of new issuers, reducing the risk judgment and selection of market players, increasing the responsibilities and pressures of the SFC, and weakening the responsibilities of issuers, sponsor agencies and accounting firms.

The two is the SFC's "price regulation, regulation and control scale" for IPO. Although it has the function of stabilizing the stock index and investor psychology in the short run, it is not conducive to the cultivation and formation of the market self-restraint mechanism, or even distorts the market supply and demand, and does not develop the medium and long term stock market.

Three, administrative intervention is too much and subjective color is strong. Market participants are hard to make a steady and clear expectation, resulting in a game between the market players and regulators, instead of the game between market players, which is not conducive to standardizing the market main body behavior and the stable operation of the market.

To solve these problems, we must push forward the reform of stock issuing registration system.

Registration is a statutory and atypical administrative license. It is a further reform and perfection of the approval system, and it is also a stock issuing supervision system with a high degree of marketization.

To sum up the practice of registration system in some countries and regions, there are basically four basic characteristics.

First, enterprises have the natural right to raise capital by issuing stocks. As long as they do not violate the interests of the state and the public, whether enterprises can issue, issue or sell at any price should be decided by the enterprises and the market independently.

The two is to implement the supervision concept centered on information disclosure. It requires enterprises to disclose sufficient and necessary investment decision information to investors. The government does not judge and endorse the asset quality and investment value of the enterprise, and the regulatory body is not responsible for the authenticity of the information disclosure, but it is responsible for the completeness, consistency and comprehensibility of the prospectus.

The three is the responsibility of the participants in the market. The issuer is the first person responsible for the disclosure of information, and the intermediary agency bears the responsibility of checking the issuer's information disclosure. The investors make their own investment decisions and invest risks on their own according to the public disclosure of information.

Four, we should implement strict management with wide access, focus on the supervision afterwards, severely punish illegal activities and protect the legitimate rights and interests of investors.

The initial plan is to establish a stock issuing and listing system with market orientation, responsibility in place, disclosure as the basis, clear expectation and strong supervision.

We must adhere to market orientation and integrate management.

We should respect market rules, minimize and simplify administrative examination and approval, clarify and stabilize market expectations, strengthen internal constraints of the market, and establish an institutional arrangement for IPO with market-oriented mechanism.

At the same time, speed up

We should strengthen supervision afterwards.

We must uphold the rule of law and govern the city according to law.

We should improve the legal system of the capital market, improve the supervision system of stock issuance and listing and protect the investors.

We must insist on disclosure as the basis and place ourselves in due diligence.

We should establish and improve the institutional arrangement centered on information disclosure, strengthen the issuers' fiduciary duty and legal responsibility for information disclosure, give full play to the role of intermediaries in the verification and control, and guide investors to improve their risk identification ability and rational investment awareness, so as to promote the market participants in the issuers, intermediaries, investors and other markets to fulfill their duties.

Stock exchanges should further improve and perfect the rules of self-discipline system, fulfill their self-discipline duties conscientiously, and better adapt to the requirements of registration system reform.

It should be noted that the reform of registration system may be faced with some risks and problems, for example, it may affect the psychological expectations of investors to expand the stock market. Some enterprises may issue high price, some companies are not of high quality and the risk of fraud issuance is increased.

Therefore, we must adhere to the principle of gradual and steady implementation, based on the national conditions, and guided by realistic problems. In the specific process of pushing forward, we should pay attention to enhancing the systematicness, pertinence and synergy of reform measures. We should not only base ourselves on the overall situation, focus on the long term, but also promote the reform, development and stability of the capital market properly.

We must adhere to overall planning and coordination, strengthen the top-level design of the market, and form a joint effort to promote the steady and healthy development of the market.

We should improve risk monitoring, early warning and disposal mechanisms, strengthen risk identification, prevention and disposal capabilities, and guard against and defuse market risks in time.