(Yicai Global) Feb. 1 -- China’s securities regulator has clarified new industry requirements for initial public offerings on stock exchange main boards, banning listings by discipline-based training, liquor and quasi-finance companies, according to investment banking insiders.

There had previously been social media reports that the China Securities Regulatory Commission would classify firms filing for main board IPOs into new categories: the prohibited, the restricted, and the supported.

In addition to the three prohibited sectors, industries in the restricted category will include food, home appliances, and pandemic-related firms, according to the reports. But business areas where IPOs will be supported include integrated circuits and advanced biomedical research and development.

IPO applications by ‘prohibited’ enterprises will no longer be accepted. Those from ‘restricted’ companies can be accepted normally but are not encouraged, and the authorities will manage and guide intermediaries to only recommend firms with strong R&D capabilities and prominent industry status. ‘Supported’ businesses can be review immediately and go public as soon as the audit is finished.

Quasi-finance companies include financial leasing firms, commercial factoring enterprises, equity investment institutions, microfinance firms, financing guarantee companies, pawnshops, and various internet financial enterprises.

The investment bank insiders told Yicai Global that they had received relevant guidance recently, which was basically the same as the reports on social media.

The prohibited category also includes firms whose business is immature, those that have expanded rapidly through franchises, as well as those for which it is difficult to judge the degree of sustainable profitability or operation.

The restricted category also covers furniture, clothing, shoes and hat companies, which are relatively traditional and have low industry barriers. It also encompasses fast-food restaurant chains.

One private equity executive told Yicai Global that the new rules for IPO filings do not always have clear definitions.

A former senior sponsor representative at a brokerage said that as far as investment banks are concerned, the matter will have little impact. Every year, there are still 400 to 500 IPOs, and there is no shortage of listing projects for banks.

Editor: Tom Litting