China's largest IPO has put investment banks under pressure as they take the brunt of regulatory concerns about PRC companies going public.

The US$8bn HKSE debut of China Construction Bank last week had lawyers and investment bankers working round the clock. But there was an added dimension for the investment bank's legal teams at lead underwriter Morgan Stanley since the advent of Practice Note 21 requiring IPO sponsors to be able to prove they have done effective due diligence.

"These deals take a lot of resources," said Bonnie Chan the in-house lawyer at Morgan Stanley who acted on the deal. "The new regulations mean that there is more challenge on the documentation side as we now have to record our due diligence very thoroughly so it means more work from the administrative point of view."

The Hong Kong Securities and Futures Commission brought in the practice note this year with Chinese companies in mind. The intention is to ensure that only financially sound companies with good corporate governance can list on the HKSE. In effect it shifts the policing of capital-hungry PRC companies onto the shoulders of investment banks.

To deal with the new regulations Morgan Stanley worked with Freshfields last year to devise a Practice Note 21 checklist. "It's a guideline for our bankers so they know which documents to prepare," continued Chan.

Morgan Stanley instructed teams led by William Barron at Davis Polk & Wardwell, Teresa Ko at Freshfields Bruckhaus Deringer and Lui Gang at Haiwen & Partners on the deal.

China Construction Bank relied on Skadden Arps, Herbert Smith and Commerce and Finance.

The rapturous welcome by investors pushed the IPO value beyond the US$6bn that had been expected and lays the ground for the expected IPOs of the Industrial and Commercial Bank of China and the Bank of China next year.