The Beijing Stock Exchange's new listing reform should be optimized through "fund subscription + account allocation."

The Beijing Stock Exchange’s IPO reform should combine capital subscription with account allocation. This move can not only avoid the significant waste of IPO funds but also allow more IPO accounts the opportunity to obtain shares.

Since December 2025, when news emerged that “the market for IPOs on the Beijing Stock Exchange has entered the online testing phase,” the modification of the IPO rules has been a focus of market attention.

Currently, the Beijing Stock Exchange’s IPOs adopt a capital subscription method, where the larger the amount of capital subscribed, the higher the probability of winning shares. This is both a primitive IPO model and a relatively simple one, where the competition is essentially about who has more money.

In comparison, the above-mentioned capital subscription IPO model has its limitations.

On one hand, it is not conducive to protecting small and medium investors. Small and medium investors have limited capital, and in the face of the capital subscription model, they are clearly at a disadvantage. Moreover, even if small and medium investors invest all their available funds, amounting to hundreds of thousands or even millions, it is still difficult to win shares, resulting in an opportunity cost of capital, which, to some extent, harms the interests of small and medium investors.

On the other hand, this capital subscription IPO model leads to a significant waste of market resources. Because this model competes based on financial strength, many investors pour all their available funds into new stock subscriptions during IPOs, resulting in a “spectacle” where thousands of billions or even trillions in funds participate in new stock subscriptions.

How should the Beijing Stock Exchange improve its IPO model? Investors will naturally think of the market capitalization allocation model used by the Shanghai and Shenzhen Stock Exchanges. After all, the Shanghai and Shenzhen Stock Exchanges also once adopted a capital subscription model, such as during the 2007 IPOs of China Shenhua and PetroChina, where the frozen capital amounts reached 2.66 trillion and 2.57 trillion respectively. Therefore, the Shanghai and Shenzhen Stock Exchanges reformed their IPO system, replacing capital subscription with market capitalization allocation. Investors pay for new shares after winning in the market capitalization allocation, which resolves the issue of resource waste and ensures that investors do not suffer losses even if they do not win shares.

For this reason, in light of the issues raised by the Beijing Stock Exchange’s IPO process, many investors and industry insiders suggest that the Beijing Stock Exchange also adopt the market capitalization allocation model. However, the reality is that the Beijing Stock Exchange has a limited scale, and the overall market capitalization of its stocks is relatively small, making it unsuitable for market capitalization allocation. As of February 27, the total circulating market capitalization of all stocks on the Beijing Stock Exchange was only 577.387 billion yuan, which is even less than the circulating market capitalization of individual stocks such as Agricultural Bank of China, Industrial and Commercial Bank of China, Kweichow Moutai, and CATL. Therefore, the Beijing Stock Exchange’s IPOs are not suitable for market capitalization allocation, and capital subscription is an unavoidable choice.

However, I believe that capital subscription can also move away from the simple model by combining capital subscription with account allocation. On one hand, the Beijing Stock Exchange can continue to adopt the capital subscription method, but on the other hand, it should limit the amount of capital that each IPO account can subscribe, for example, by stipulating that each IPO account can subscribe for a maximum of 5,000 shares (this allocation limit can be adjusted based on the scale of new share issuance). This way, the amount of capital spent by individual IPO accounts would be relatively limited, and the situation of massive funds participating in IPOs would no longer occur. This move would not only avoid the significant waste of IPO funds but also allow more IPO accounts to have the opportunity to win shares, benefiting the interests of a large number of small and medium investors, and truly represents a “win-win” or even “multi-win” situation.

Author: Pi Haizhou

Source: “Financial Review · Wealth”, Issue 3, 2026

Editor: Liu Qiang

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