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IPO Bankers Become Frogs in Hot Water Amid China Market Halt

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Shen Wei, one of the first 600 investment bankers authorized to sign off on initial public offerings in China, said the license that made him one of the “golden collared” has lost its magic.

The teacher’s son studied 14-hours a day for a month in 2004 to qualify after China’s securities regulator mandated that two so-called baodai, or sponsor representatives, conduct due diligence and sign off on every IPO to curb fraud. Demand for such bankers is now being eroded by a freeze on IPOs, a surge in people getting licensed and an easing of underwriting rules.