Wu Qing, chairman of the CSRC, China's top securities regulator, speaks to media at a press conference during the two sessions on March 6, 2024. Photo: VCG

China's top securities regulator, the China Securities Regulatory Commission (CSRC), is allocating more budget to conduct more inspections and audits of the companies seeking IPOs, with a targeted penetration ratio of at least 25 percent, the Shanghai Securities News reported on Monday.

Per its budget report, the securities watchdog will intensify the check-ups of listed companies, bond issuers, the firms that seek listing at the National Equities Exchange and Quotations and the companies seeking IPOs in 2024.

Inspectors plan to examine one fourth of all companies seeking IPOs this year, a significant lift from 2023's 5-percent, according to the newspaper.

The move came as the CSRC intensifies efforts to beef up institutional buildup, better ensure investor protections, and safeguard the stable development of China's capital market, the world's second largest.

According to a copy of the budget report, published by the CSRC on March 26, the regulator plans to allocate 57.80 million yuan ($7.99 million) for a three-year-long program to fund enhanced law enforcement to cope with illicit activities in a "fast and forceful manner, cleanse the market and provide legal safeguard for the high-quality development of the capital market."

The fund represents an increase of 10.29 million yuan or 21.67 percent from 2023 figures. 

The CSRC vowed to resolutely crack down on irregular and illicit activities including IPO fraud, financial fraud, market manipulation and insider trading, and improve the regulator's ability to carry out a stern and comprehensive enforcement of the country's securities law.

Actions that challenge the government's regulatory red lines, top executives of listed companies who carry out organized and premeditated financial fraud and the problematic securities intermediaries will be among those that fall into the regulators' cross-hairs, according to the newspaper.

The scope of inspections covering all high-risk segments of the securities sector will be increased to 67 percent from 2023's 62.57 percent. Meanwhile, the funding for financial oversight also saw an increase of 143.47 percent year-on-year.

China's central government added ensuring the stability of the capital market in the Government Work Report in March for the first time following a period of high volatility in the Chinese A-share market in February.