The comprehensive implementation of the registration-based system of IPO regulation in China: practice, progress, problems and prospects

Abstract

In June 2019, the Shanghai Stock Exchange Sci-tech Innovation Board was established with the deployment of the registration-based system as a pilot test, opening the chapter of China’s initial public offering regulatory reform. Implemented for nearly four years under gradualism, the registration-based system was expanded to the whole Chinese stock market in February 2023, further catching the spotlight on its functioning and effectiveness in accommodating issuers while safeguarding investors to promote market development. This article conducts a close examination of the registration-based system, exploring its functioning in practice, canvassing its progress and problems in accommodating issuers and looking into the landscape and prospects of investor protection. This article argues that although the registration-based system does not eliminate regulatory uncertainty, it improves regulatory efficiency to attract issuers while relying on the close engagement of public regulators in the transition era and supporting mechanisms in the long run to ensure investor protection.