The China Securities Regulatory Commission (CSRC) will resume initial public offerings (IPOs) by companies and further reform the current IPO mechanism, said Deng Ge, CSRC spokesman at a press conference on November 6.

Ten of the 28 companies that have already gained regulatory approval for new share sales will be the first to start their IPOs after November 20, and the other 18 will go public by the end of this year. The CSRC will also resume IPO approval meetings and make a proper approval schedule.

Reform measures include scrapping the requirement for full payment of shares into escrow when an investor bids to subscribe new shares and giving more priority to information disclosure instead of pre-IPO approvals. The regulator will further simplify the pricing procedures for small-cap IPOs under 20 million shares in order to lower the IPO costs for small and medium-sized companies.

The IPO resumption indicates that the self-restoration of the stock market is entering a new stage.

When China's stock market plunged in June this year, panic was aroused among investors. In order to stabilize the market, the securities regulator froze IPOs on July 4, with 28 companies that have obtained CSRC's permission postponing their IPOs.

The regulator's interventions have greatly restored the ailing stock market, and the market has since begun self-repairing. Although the restoration has come at the cost of distorted supply and demand in the stock market, after several months, investors' confidence has been boosted, and the market is recovering.

In October, the Shanghai Composite Index was up 10.8 percent and the Shenzhen Component Index grew by 15.6 percent. Moreover, in the first week of November, the Shanghai Composite Index rose by more than 6 percent, while the Shenzhen Component Index jumped by 6.3 percent.

By November 6, the benchmark Shanghai Composite Index had rallied by 20.3 percent since August 26, which was the lowest point in this year. A 20 percent stock index growth signals a potential bull market. Therefore, it is reasonable for the CSRC to announce the relaunch of IPOs at this moment.