China's top securities watchdog says IPO registration reforms are moving along in an orderly fashion and may be completed in about two years.
"The State Council meeting Wednesday decided to propose to set the deadline of modifying the current securities laws with regard to registration based IPOs as two years. The ultimate time frame would depend on the actual work. So far the work is progressing with order," said Deng Ge, spokesperson, China Securities Regulatory Commission.
IPO registration is one of the biggest reforms for China's capital markets. IPO candidates under the current system have to go through a lengthy official assessment, which often takes months, and sometimes leads to corruption. By adopting a registration system, companies would only need to be qualified to register with the securities authority before listing.
Analysts say the move would give smaller companies a better chance. It may also pose more risks to Chinese individual investors because they don't usually have the knowledge to make investment decisions.
Experts say that in the long run, the reforms are going to change the imbalance between direct financing and indirect financing in China.