No date set for resuming China IPO approvals – CSRC

Approvals for listings on domestic bourses slowed down from the middle of 2012 and none have been granted in the last four months. Nearly 900 companies were on the CSRC's official waiting list as of February, and it estimated the backlog will take years to clear. The regulator has never approved more than 150 private equity-backed offerings in a single year, with fewer than 100 coming in 2012.

In January, the CSRC ordered underwriters and auditors to complete self-examination reports on listing candidates' risk disclosure and operational performance evaluation for submission by March 31. Sponsors have been told to withdraw IPO applications where companies don't meet the required standards and they may face penalties if they fail to do this. The CSRC will conduct selective inspections based on the reports.

The regulator said that many companies have canceled their IPO applications and it plans to revoke three sponsors' licenses for neglecting to discover financial manipulation by clients.

Given the lack of IPO exits, private equity firms are considering other options as they seek to return capital to investors. According to a study by specialist investment bank China First Capital, more than 7,500 portfolio companies remain in private equity firms' portfolios from investments made since 2000. It estimates at least 200 of these are attractive targets for secondary buyers.

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• Topics
• Greater China
• Exits
• Regulation
• CSRC
• China
• Exit
• IPO
• Secondaries