The CSRC reports on the on-site inspections of companies initiating offerings in 2025: "Immediate withdrawal upon discovery" and other market chaos have been fundamentally reversed.

Conducting on-site inspections of companies applying for initial public offerings (IPOs) is an important part of the full-chain regulation of the IPO process. It also serves as a key measure to urge and guide issuers and intermediary agencies to strengthen their quality awareness, improve application quality, and promote a solid foundation for the capital market. By 2025, the China Securities Regulatory Commission (CSRC) will focus on risk prevention, strengthened regulation, and high-quality development. In on-site inspections, it will adhere to its regulatory responsibilities, strictly control the entry point of the capital market, and follow the principle of importance to prevent oversimplification of inspections. It will reasonably balance investor protection and institutional inclusiveness. Throughout the year, 16 companies were randomly selected for inspection, along with 4 problem-oriented companies, involving 8 main board companies, 9 STAR Market companies, and 3 ChiNext companies. For companies applying for an initial public offering, the CSRC regularly conducts two types of on-site inspections: random selection and problem-oriented inspections. For newly accepted companies, approximately 20% are randomly selected for inspection to verify application quality. The inspections emphasize the importance principle to prevent a one-size-fits-all approach. After inspections, regulatory authorities tailor corrective measures based on the nature of the issues and advance review procedures accordingly. For companies under review, if there are significant doubts related to listing conditions that cannot be reasonably explained, the CSRC conducts problem-oriented on-site inspections following proper procedures. The inspection work enhances risk prevention and strictly investigates malicious behaviors such as disclosure fraud and financial falsification, which are attempts to pass through with problems. Once confirmed, the regulatory authorities will decisively reject the issuance and listing application and pursue legal responsibility for relevant entities. Based on the annual inspection results, the quality of applications from newly accepted companies has further improved. By the end of 2025, all 16 randomly selected companies had not withdrawn their IPO applications, and 7 companies had already passed review by the stock exchange listing committees. Market participants have gained a clearer understanding of on-site inspection work and have more definite expectations. Market chaos such as “withdraw upon inspection” has been fundamentally reversed. (CSRC)