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在线翻译:
szdaily -> Markets -> 
Underwriters punished for lax due diligence
    2021-04-08  08:53    Shenzhen Daily

THE securities regulator announced penalties against a slew of underwriters and individual bankers Tuesday, sending a clear warning regarding sloppy due diligence.

Nearly 40 individuals and eight investment banks were punished for inadequate due diligence in the first quarter, notices on the website of the China Securities Regulatory Commission (CSRC) showed.

Some 29 deals were involved ranging from share and bond sales to mergers and acquisitions. China International Capital Corp. (CICC) and Citic Securities were among the underwriters urged to take corrective measures.

The punishments vary, but most individuals are banned from certain business practices for three months, notices on the CSRC website showed, while the brokerages were mostly urged to take corrective measures and improve their internal controls.

China has stepped up supervision of its capital markets in recent months as regulators seek to rein in financial risks following years of deregulation.

Yi Huiman, chairman of the China Securities Regulatory Commission, last month urged underwriters to tighten scrutiny on companies seeking to list their shares, vowing to punish those trying to bring “sick” companies to the initial public offering (IPO) market.

Many underwriters “wear new shoes but walk on the old path” and they must step up their due diligence and shoulder more responsibility, Yi said.

China has adopted a U.S.-style, registration-based IPO system on Shanghai’s Nasdaq-style STAR Market and Shenzhen’s startup board ChiNext, in a bold reform designed to give market a bigger role in evaluating IPO candidates.

But “the registration-based IPO system doesn’t mean looser vetting requirements,” Yi said. It means providing investors with “investable” companies that have more value, so “requirements on gatekeepers are actually higher,” he said.

(SD-Agencies)

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