(Yicai Global) Feb 26 -- China has decided to delay for two years the introduction of a US-style registration system for stock market listings, citing risks and economic bubbles in European and US markets.

The external environment facing China makes the timing of the reform uncertain, said Liu Shiyu, chairman of the China Securities Regulatory Commission. He proposed postponing implementation to February 2020 to give the country time to put in the necessary groundwork.

New listings are subject to CSRC approvals at present, though it is China's aim to transition to a more market-oriented initial public offering system. In 2015, the country unveiled plans to change from an approval-based stock listing system for the Shanghai and Shenzhen exchanges to one based on registration similar to that used in the US.China's top legislature decided on Feb. 23 to prolong to Feb. 29, 2020 a mandate that permits the State Council, or cabinet, to prepare for reforms that will change the IPO procedure. The mandate was scheduled to expire in two days time, the original deadline for implementation.

Liu said issues facing the reform effort include the building of a multi-level market system, maturity of traders, the ability of issuing bodies, intermediaries and inquirers to independently set prices, and the reasonable valuation of China's broader equity market. The country needs to improve in these areas, he added.

China has tightened restrictions on IPOs over the past six months. The CSRC set up the Issuance Examination Committee late last year. For 2018, regulators had processed 27 IPO applications as of Jan. 20, with a mere 12 getting the green light, representing an overall pass rate of just over 44 percent. This represents a steep fall compared with last year's 79 percent approval rating.

Increasingly stringent measures will see new share issues fall to between 300 to 350 this year, industry insiders predict. Some 438 new stocks listed on the A-share market last year and the commission approved 401 applications, with both figures hitting all-time highs.