(Yicai Global) March 19 -- Chinese regulators launched a registration-based system for initial public offerings on the country’s Star Market and Growth Enterprises Market last year, but scrutiny of application materials became stricter in December. Brokers predict IPO filings will plunge this year as a consequence.

“The number of IPO filings will definitely decline sharply this year after the comprehensive tightening of supervision,” said the head of an investment banking department at a mid-sized brokerage.

More than 100 companies have suspended their IPO reviews since the end of last year, according to publicly available information. Twenty had pulled plans to list as of 6.00 p.m. on March 18, according to data from the two exchanges. There were 35 such companies in February, 16 of which voluntarily withdrew their IPO filings because they were chosen by the exchanges for regulatory on-site verification.

Regulators have raised the requirements for issuers’ financial indicators and hiked the responsibilities of intermediary agencies, Yicai Global learned from a source at another securities firm. The entire process has become more difficult, according to a person with a leading brokerage.

Still, while the financial requirements have become more detailed, the conditions for compliance and information disclosure have not changed, said a source at another big securities company.

All the sources Yicai Global spoke with said the review of IPO applications will become more stringent. “There is no sign of loosening yet, and the strict review is expected to continue,” one said. “Too many companies have applied for listing under the registration system.”

Editors: Tang Shihua, Peter Thomas