China Slashes New IPOs

The China Securities Regulatory Commission (CSRC) has recently said that China will suspend new share issues after the withdrawal of 28 initial public offerings (IPO). Examination of IPO will go on, but the number of issues and financing amount will be significantly reduced.

In view of the recent extreme volatility in both spot and futures stock market, the China Financial Futures Exchange (CFFEX) has imposed regulatory measures including limitation of opening position on stock index futures contracts especially in some accounts of CSI 500 stock index futures contracts in accordance with Article 22 of the Measures of China Financial Futures Exchange on Dealing with Violations and Breaches.

The CSRC requested CFFEX to continue implementation of the initial effective measures and make greater efforts to expand the scope of the inspection, in line with project verification conducted by CSRC on various suspected illegal and irregular conduct. For malicious short-selling, the use of stock index futures on the current cross-market manipulation and other illegal activities, once verified, will be severely punished by CSRC according to law.

Currently, CSRC is carrying out a law enforcement campaign, with crackdown on fabricating and spreading rumors in stock market as one of the key areas of enforcement. A number of typical cases have been investigated and published. The CSRC will work with public security organs and the media authorities, to further crack down on fabricating and spreading rumours in stock market. At the same time, CSRC will strengthen policy publicity and interpretation to promptly clarify any false reports. Investors are also reminded about information released by authorities, not to spread rumours or believe in rumours for the sake of self-protection.

For further details, see Measures of China Financial Futures Exchange on Dealing with Violations and Breaches.