China’s securities regulator has told investment banks to pause initial public offerings and has halted large share sales by existing shareholders, according to a Financial Times report on Tuesday, as Beijing intensifies efforts to stabilise equity markets after their steepest monthly fall in more than a decade.
The informal guidance, which Reuters said it could not immediately verify, follows a separate package of liquidity measures announced on Monday by the People’s Bank of China (PBOC) and financial regulators. Together, the steps signal that policymakers are prepared to restrict new equity supply while channelling cheaper funding towards share buybacks.
The moves matter for global investors because China’s onshore market is one of the world’s largest pools of equity capital, and curbs on listings tend to reshape deal pipelines for international banks and issuers alike.
Key Takeaways
- The China Securities Regulatory Commission has reportedly told banks to pause IPOs and suspend large shareholder sell-downs until markets recover.
- The blue-chip CSI300 index fell 8.5% in October, its worst monthly performance in more than a decade.
- The PBOC cut the rate on its share buyback relending facility to 1% from 1.25% and made the scheme permanent.
- Thirty-one securities and fund firms have applied for more than 100 billion yuan through a third round of a central bank swap facility.
Regulator Applies Informal Window Guidance
According to the Financial Times, which cited three people with knowledge of the discussions, the China Securities Regulatory Commission (CSRC) held meetings with investment banks over the past few days and issued so-called window guidance, an informal instruction rather than a published rule. Banks were asked to put new listings on hold, while large share disposals by existing shareholders were suspended until conditions improve.
The regulator has not publicly confirmed the instructions. Market commentary from Saxo and others on Tuesday nonetheless referred to a halt on large IPOs and share sales as part of the wider set of support measures now in place.
Beijing has used similar tools in previous periods of stress, most notably during the 2015 market crash, when new listings were frozen for several months. Restricting fresh supply is intended to ease selling pressure on existing shares while other measures draw in new buyers.
October Sell-Off Prompts Policy Response
The CSI300 index of leading Shanghai and Shenzhen shares lost 8.5% in October, its sharpest monthly decline in more than a decade, according to Reuters. The sell-off was driven by a slump in large technology shares, a prolonged property downturn and weakening investor sentiment, market reports said.
On Monday the PBOC, the National Financial Regulatory Administration and the CSRC set out a coordinated response. The central bank said its relending facility for share buybacks and stake increases, launched in 2024 as a temporary measure, would become a long-term arrangement, and it lowered the facility’s interest rate to 1% from 1.25%, according to the state news agency Xinhua and Reuters.
The authorities also confirmed a third operation under the Securities, Funds and Insurance Companies Swap Facility, which allows eligible institutions to pledge bonds, equity exchange-traded funds and CSI300 constituent shares in exchange for highly liquid assets such as government bonds. Thirty-one securities and fund companies have applied for more than 100 billion yuan, about $14.9 billion, through the new round, which carries a one-year term that can be extended. Two earlier operations, in October 2024 and January 2025, provided a combined 105 billion yuan.
Markets Give Muted Initial Response
Despite the new measures, mainland Chinese shares weakened in early trading on Tuesday, with the CSI300 and the Shanghai Composite each falling about 1% and largely reversing Monday’s rebound, according to market reports. Government bond yields were broadly steady.
Some fund managers told Reuters and Bloomberg that the package fell short of expectations, noting that both the swap facility and the relending scheme have been in place since 2024 and that their incremental impact may therefore be limited. Others said the latest swap round underlined official commitment to capital market stability, while cautioning that global volatility continues to weigh on sentiment.
The CSRC also said it would urge listed companies that have announced buyback or share-increase plans to accelerate them, and would press firms that have applied for buyback loans to step up their purchases, according to Xinhua.
Implications for Issuers and Banks
A pause in new listings would delay fundraising plans for companies awaiting approval, including those in the technology and advanced manufacturing sectors that policymakers have sought to support through the capital markets.
For international and domestic investment banks, the guidance is likely to reduce underwriting fees in the fourth quarter. It may also redirect some issuers towards offshore venues, although Hong Kong listings by mainland companies remain subject to separate CSRC filing requirements.
Large shareholders, including pre-IPO investors and company founders, would also face longer waits to monetise their holdings, a constraint that has previously weighed on private equity and venture capital returns in China.
Looking ahead, investors will watch whether Beijing formalises the IPO pause or sets out criteria for restarting listings, and whether the expanded swap and relending facilities translate into sustained buying. The pace of corporate buybacks and any further measures to attract long-term institutional money are likely to shape whether October’s sell-off marks a floor for Chinese equities.
