(Yicai Global) April 7 -- China’s main securities regulator has required eight financial institutions, including Citic Securities, Haitong Securities, and China International Capital, to do better after their poor performance when advising firms in their initial public offerings on Shanghai's Star Market.

The China Securities Regulatory Commission yesterday announced 40 administrative punishments. Some of the IPOs were completed while some applications were withdrawn.

Many Chinese firms took back their prospectuses during on-site inspections this year, and one of the biggest reasons was their IPO advisors' low practice quality, Yi Huiman, chairman of the CSRC, said on a forum on March 20.

More than 100 companies have suspended their IPO reviews in China this year, Yicai Global reported on March 22, citing publicly available information.

Shanghai-based Haitong Securities was on the top of the regulator's list with three penalties for inadequate verification regarding three firms, including sensor manufacturer Cubic Sensor and Instrument, beef producer Xinlv Food, and concrete product maker Zhongji Pile Industry.

Citic Securities was on the list because medical equipment firm Yhlo Biotech had submitted inconsistent and polished financial data.

These violations reflect weaknesses in the investment banks' internal control systems, the regulator said in the statement. The firms need to rectify and submit reports to the CSRC.

Launched in July 2019, the Nasdaq-style Star Market uses a registration-based IPO system. Shenzhen's ChiNext adopted a similar system last August to make it easier for firms to get listed. But the system reform doesn't mean that the rules are eased as bourses need to fulfill their duties in reviewing the applications, Yi said last month.

Editor: Emmi Laine, Xiao Yi