By Ba Shusong, Chen Ruoyu　

Date: 2004/02/24

Abstract:

The limitations of China's regulatory system on new stock issuance is shown in the fact that no fundamental changes have taken place in the traditional thinking on regulations characterized by substantial verification and value judgment under the authorization system, the ambiguity in the definition of responsibility and rights of the stock market participants, false information exposure of the listed companies, increasing cost and unfairness in the strategic bundled stock sales, etc. The solution is in a foresighted institutional arrangement aiming at an optimized new stock issuance mechanism, which include an approval system under registration system, sponsor system, increasing bundled stock issuance, perfecting the ways of new stock issuance with the internet price bidding as the main form, strengthening the law system and intensifying law enforcement, as well as taking advantage of the monitoring function of the stock exchanges.