SHANGHAI, Aug 14 (Reuters) – China’s securities regulators have fined 19 institutional investors for tightening control over pricing behavior under a liberalized listing system.
China launched the technology-oriented STAR market in Shanghai in mid-2019, along with the introduction of a registration-based IPO system based on the US model.
The Securities Association of China (SAC) announced late Friday that a recent joint investigation with the Shanghai Stock Exchange into STAR IPOs uncovered problems with 19 institutional investors.
Problems included weak internal controls, inadequate justification for setting prices, non-compliance with prescribed procedures and improper retention of working papers, the SAC said in a statement without identifying the companies.
An insurer was temporarily banned from participating in the institutional part of IPO subscriptions, while eight fund houses and one asset manager were banned from the stock placement market for a month, the statement said.
SAC said regulators will strengthen oversight and increase penalties for wrongdoing to help maintain order in IPO pricing and protect investors.
China has already replicated the registration-based IPO system on Shenzhen’s startup board ChiNext and intends to gradually expand the mechanism to the rest of the Chinese stock market, which still uses a system based on regulatory approvals.
Reporting by Samuel Shen and Andrew Galbraith; Adaptation by Kim Coghill
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