Lawyers in China have recently noticed that the review process for initial public offerings (IPOs)has sped up, especially for large state-owned enterprise (SOE) and companies with clear development history and relatively simple organizational structures.
" In the past the review process for IPOs could take more than one even two years," said Shi Zhenkai, a partner of Beijing Tian Yuan Law Firm, who has advised on the listings since 1998. "The IPO review process this year, however, is taking less than one year from application through to listing, and some even take less than six months," he said.
According to Shanghai Securities News, the China Securities Regulatory Commission (CSRC) accepted nearly 200 IPO applications in the first quarter of this year for the city's main board and the Shenzhen Small and Medium-sized Enterprises (SME) Board, and is currently reviewing more than 200 IPO applications for ChiNext.
At this rate, the number of IPOs for 2011 may even exceed the lofty mark set in 2010. Last year 347 companies floated in China-- 204 on the SME, 117 on the ChiNext and 26 on Shanghai Stock Exchange.
According to Shi, IPO applications from large SOEs often secure quicker approval from the CSRC because most of disclosure issues relating to IPOs have been settled during reorganisation and restructuring processes that are required to occur on a regular basis.
Apart from the acceleration of the IPO review process, CSRC has also foreshadowed greater focus on Intellectual Property (IP) issues in connection with IPOs.
"Any IP relates issues like patents and high technology will draw the attention of CSRC since the Suzhou Goldengreen incident last year," said Shi. Suzhou Goldengreen Technologies, one of the largest manufacturers of OPC Drums in China, had trading of its shares halted last year after it failed to provide valid patent technology information in its prospectus.ALB