The first batch of registration-based initial public offerings of 10 enterprises were adopted on the main boards of China's Shanghai and Shenzhen stock exchanges on Monday.

This means that whether in Shanghai's or Shenzhen's bourse, the market-wide implementation of the registration-based IPO mechanism was officially opened for China's A shares. Under the new mechanism, no price fluctuation limit is set for the first five trading days.

In the past, if a company wanted to enter the capital market for direct financing, it faced extremely complex and demanding conditions, apart from prolonged waiting time.

The registration system will transform the substantive threshold under the approval system into information disclosure requirements, and the authorities will no longer judge the investment value of enterprises, leaving the choice of resource allocation and capital flow fully upon the market. This will not only improve the operating efficiency of the capital market, but also greatly enhance its adaptability to the real economy.

The new mechanism will also further clarify the division of responsibilities among different regulatory departments and help improve the quality, efficiency and predictability of audit registration. As Yi Huiman, chairman of the China Securities Regulatory Commission, said, the registration-based IPO mechanism will touch the underlying logic of supervision and produce far-reaching influences on the overall capital market.

The impact of the comprehensive registration system will be directly reflected in the long-term sustainable development of listed companies. The comprehensive registration system will optimize the issuance conditions and simplify the procedures, and lead to more full information disclosure and market-oriented pricing as the registration system's biggest features will be more favorable to long-term equity capital.

Under the approval system, IPO applications by companies with great growth potential were possibly rejected. With trading rules more in line with mature markets under the new system, China's A-share market will open space for long-term and value investors to share the growth dividends of its high-quality companies.

The essence of the registration system is to hand over investors' choice to the market, strengthen market constraints and the rule of law, and improve the convenience of investment and financing. When the market becomes the tester of enterprise value, China's A-share market will further enhance the ability of value discovery, and its market ecology will enter a more mature and rational stage.