IPO Pre-Review Risks Highlighted: Call for Uniform Standards, Transparency

The pre-review stage of the Initial Public Offering (IPO) process, which implements a non-disclosure policy for relevant information, plays a crucial role in protecting a company's commercial secrets. However, this mechanism also presents potential risks. Firstly, the pre-review stage may not fully and accurately identify issues within the company's application documents. Some companies might develop a dependency on this stage, leading to insufficient preparation of their application materials. As a result, potential risks may not be fully disclosed during the pre-review, only to surface during the formal application process. Secondly, if the pre-review standards are not clearly defined and uniform, different companies may face varied scrutiny, affecting the fairness of the market competition. Additionally, the non-disclosure of pre-review information may reduce regulatory transparency, increasing market uncertainty and investor concerns about information asymmetry. There is also a risk of rent-seeking behavior that warrants attention.

To address these potential risks, it is essential to establish comprehensive pre-review standards and apply them uniformly to all companies to prevent differential treatment and ensure fairness in the review process. The review process and mechanisms should be improved, and the professional capabilities of reviewers should be enhanced. For companies listed on the Science and Technology Innovation Board, it is crucial to involve relevant experts in the core technology areas to ensure the scientific, accurate, and fair nature of the pre-review process.

Furthermore, companies should be held accountable for their information disclosure responsibilities. It is necessary to clearly require companies to disclose the pre-review questionnaire and response documents simultaneously during the formal application process. The responsibilities of intermediary institutions should be strengthened, and securities firms, accountants, and lawyers should be guided to strictly fulfill their due diligence obligations. This will drive companies to prepare their application materials in a standardized manner and disclose potential risks.

Lastly, exchanges should conduct rigorous checks during the formal application stage, supplementing the review of issues not covered in the pre-review. They should focus on deeply analyzing the sustainability of core technologies. Additionally, it is crucial to ensure the completeness, authenticity, accuracy, and timeliness of the information disclosed by companies. This comprehensive approach will help mitigate the risks associated with the IPO pre-review process and ensure a more transparent and fair market environment for all participants.