The China Securities Regulatory Commission CSRC has put out draft rules to encourage a book building process with investors - a radical departure from past practice. Market participants have been given until September 5 to respond.
Book building is a price discovery process used by international banks to fine tune the pricing of the IPO they are underwriting. Pricing is determined over a two week to one month process during which the deal's syndicate banks hype the stock to investors and the company and its lead managers meet with institutional clients to hear their feedback. Pricing is fixed at the end of the roadshow based on the level of demand and...
