Financial reform is never easy. That has only been made more obvious by the relaunch of IPOs.

Since the lifting of the one-year moratorium in January, about 50 companies have raised capital in the capital market through new listings. But things didn't turn out as envisaged under the new rules, which were designed by China Securities Regulatory Commission to shift the emphasis from official approval to self-regulation.

Restart of IPOs

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The market obviously is not ready for such drastic changes that touch on the fundamental regulatory principle.

Instead of raising new capital for business expansion, the majority of those IPO companies used their market listing as a way for the controlling shareholders to unload their holdings. The China Securities Regulatory Commission blocked the IPO of at least one company when it was made known that more than 80 percent of the shares it offered for sale were held by its major shareholders.

What's more, rampant speculation on the newly issued shares has pushed prices to unreasonable levels. All the IPO shares rose by an average of more than 40 percent on the first day of trading. Such a performance has confounded some stock analysts and confused many investors, raising widespread speculation of price manipulation.

Such irregularities have discredited the CSRC's regulatory reform efforts to bring the market rules and practices more in line with internationally accepted standards. In a micro blog, Fudan University finance professor Xie Baisan wrote that the "IPO madness" has shown that CSRC's reform is a "complete failure".

Many other market commentators share Xie's view and expressed their disappointment at the CSRC's efforts. There are growing calls for the return to the old days of authoritative control, requiring explicit permission and approval from the CSRC for specific stock transactions.

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