BEIJING, May 23 -- China has dropped a rule that limits initial public offerings to existing stock investors and expanded the maximum amount of shares individuals can buy in a single issuance, the two stock exchanges said.
Either new investors or existing stockholders in the Shanghai and Shenzhen bourses can now use their capital to apply to buy IPO shares, the two exchanges said after the rules were unveiled on Saturday.
Previously, only existing stock investors could subscribe to IPOs and they were assigned quota based on the total market value of securities they held.
"The new subscription method will likely attract more funds, which is expected to pave the way for the successful issuances of large-cap blue chips in the future," the Shanghai bourse said in a separate statement.
China unveiled rules to restart IPOs and secondary offerings this month after a yearlong ban due to the country's program to make as much as US$250 billion in state-owned shares of listed firms fully tradable.
Large companies including the Bank of China and China Mobile (Hong Kong) Ltd have indicated they plan to sell Class A shares when market sentiment is ready.
Thirty-two companies had already gained regulatory approval to launch IPOs before last year's stock-sales moratorium, according to the China Securities Regulatory Commission.
Analysts have expected the first IPO after the resumption to kick off early next month, most probably on the second board in Shenzhen.
The rules issued last weekend also noted investors can now apply to buy up to 99.9 million yuan-backed stocks in Shanghai and as many as 999.9 million local-currency shares in Shenzhen.
(Source: Shanghai Daily) | 
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