hinese regulator denies immediate stock listing reform

The China Securities Regulatory Commission (CSRC) said Wednesday it will not carry out stock listing reform shortly after March 1, and the reform will instead be gradual and steady. CSRC spokesman Deng Ge made the remarks as some investors anticipated that the forthcoming reform, which is designed to facilitate stock listing, will put downward pressure on the market due to a possible stock supply hike. Last month, the National People's Congress (NPC) Standing Committee, China's top legislature, approved a State Council proposal to shift stock listing from an approval-based mechanism to registration-based one. The NPC decision will take effect on March 1, 2016 and will be valid for two years. This means that the new stock listing mechanism could come as soon as March and as late as February 2018. "The NPC decision will be effective on March 1, but it does not necessarily mean that we will start the reform that day," said Deng. The CSRC is drafting regulations and rules for the registration-based mechanism and the commission will solicit public opinion on the draft, according to him. "The CSRC will announce the date of the reform after the completion of all the regulations and rules," said the spokesman. Deng said there will not be a surge in stock supply under the new mechanism nor an immediate autonomy for issuers to price their shares. The CSRC is now still working under the approval-based mechanism, he said. China's stock market plunged repeatedly in the new year as investor sentiment has yet to recover. The benchmark Shanghai Composite Index lost 2.42 percent to close at 2,949.6 points on Wednesday, and it has declined 16.7 percent so far in 2016, despite a mild recovery in autumn and winter following a stock rout last summer.