(Yicai Global) March 22 -- China's sudden uptick in the number of withdrawn initial public offering applications is related to advisors and not the IPO-hopefuls themselves, according to the chief of the main securities regulator.

A high percentage of prospectuses have been taken back amid on-site verification, but it doesn't mean there are big problems at these companies, Yi Huiman, chairman of the China Securities Regulatory Commission, said during a speech at the China Development Forum on March 20, posted on the regulator's website.

"One of the important reasons is that the practice quality of many advisors is not high," said Yi, adding that the delays are not caused by accounting fraud, according to preliminary information.

Chinese regulators launched a registration-based system for IPOs on Shanghai's Star Market and Shenzhen's ChiNext board last year, which has changed the review procedures. Yicai Global reported on March 19, citing brokers who predicted that IPO filings will plunge this year as a consequence.

More than 100 companies have suspended their IPO reviews since the end of last year, according to publicly available information.

The registration-based system does not mean relaxing the review requirements, and China is firmly committed to its unshakable system reform, said Yi.

Many intermediary agencies do not have the concepts, structures, and capabilities that match the registration system, said Yi. The regulator will further analyze these problems and urge those agencies to improve their accountability while seriously dealing with false statements, he added.

Supervising for Stability

"IPOs involve public interest," said the CSRC chief. Markets around the world have their own mechanisms to supervise the process, he said, giving the examples of the US and Hong Kong regulators with their specialized teams.

The Star Market and the ChiNext board must perform their duties strictly and the CSRC checks on the exchanges' review quality, issuance conditions, and information disclosure, said the official. The CSRC will continue to seek progress while maintaining stability and improve the supervision mechanism of the entire registration system, Yi added.

Moreover, China will adhere to the opening-up of its capital markets and adopt an open and supportive attitude towards the establishment of institutions, businesses, and products, said Yi.

Meanwhile, the country must pay attention to the relationship between its opening-up and risk prevention. It must prevent large foreign capital inflows and outflows while properly dealing with listed firms engaged in business in China, Yi concluded.

Editor: Emmi Laine, Xiao Yi