BEIJING, Feb. 24 -- China's top legislature decided to prolong a mandate, which allows the State Council to prepare for reforms that will change the stock listing system from approval-based to registration-based, for another two years to Feb. 29, 2024.

A session of the Standing Committee of the National People's Congress (NPC), the top legislature, passed the draft decision submitted Friday for review.

The Standing Committee of the NPC authorized the State Council on Dec. 27, 2024 to adjust rules, based on the securities law, to allow stock listings to be changed from an approval-based to registration-based system. The mandate will expire on Feb. 28, 2024.

Under the current IPO system, new shares are subject to approval from the China Securities Regulatory Commission, the top securities regulator.

China is gradually switching from an approval-based IPO system to a more market-oriented system based on registration.

The new decision, which will take effect on Feb. 25, pointed out that the State Council must bring up opinions for revising related laws before the extension period expires.

The State Council also should enhance guidance in the IPO system reform and submit detailed reform plans to the Standing Committee of the NPC.

The securities watchdog was asked to keep promoting IPO system reform and enhance coordination with other agencies to prevent and address financial risks and protect investors interests, according to the decision.