| This paper takes an overall review on the IPO institution evolution process inChina and reveals that the IPO institution evolution process is a gradual evolutionfrom strong administrative intervention to less administrative intervention and moremarketization, which is in match with the economic reform process from plannedeconomy to a socialist market economy in China.Since2009，there have been four reforms for the IPO system. This studyexamines these four reforms deeply, finding their advantages and disadvantages.Board trading system (44%) for the first day of new shares to be listed, which isdesigned to restrain speculation of new shares, leads to the expectation of continuoussoaring prices instead. Window guidance for the price earnings ratio to control theissuance price results in too low prices, which intensifies speculation phenomenon.The issuance examination committee system means over-concentration of power. Inthe sponsor system, there is obvious conspiracy between the issuer and the sponsorinstitution, because they have highly common interests.For the problems described above, this article, by drawing on the experience ofmature markets abroad, provides opinions and suggestions for further reformation ofthe IPO system. After the Third Plenary Session of the Eighteenth Central Committeeof the CPC, the State Council makes it clear that market should play a key role in theallocation of resources and the securities issuance system should transform fromapproval system to registration system. With this background, this study puts forwardthe following suggestions for further reform: take T+0system on the first day of newstocks to be listed; transfer the approval power to the stock exchange; improve thesponsor system, especially by increasing the cost of illegal behaviors of sponsors;reshape the principle of value investing and long-term investment; adopt shelfoffering. This study provides important reference for the further reform of the IPOsystem under the new economic situation. |
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