China publishes offshore listing rules to revive foreign IPOs

February 17, 2023 11:22 PM AEDT | By Reuters
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BEIJING (Reuters) -China's securities regulator on Friday published long-awaited rules regulating offshore listings, reviving foreign initial public offerings (IPOs) by Chinese firms after a regulatory freeze since July 2021.

The rules, published by the China Securities Regulatory Commission (CSRC) and effective from March 31, are designed to give clear guidance to companies wanting to list offshore and access liquid capital markets in places like the United States.

Under the rules, the CSRC will vet offshore listings under a new filing system that effectively ends decades of freewheeling overseas IPOs by Chinese companies.

The rules come after Beijing and Washington solved their long-standing audit dispute in December, removing U.S. delisting risk for Chinese companies.

"Offshore listing is a key component of China's capital markets opening," the CSRC said in a statement.

The rule issuance "shows China will not change its direction of opening up" amid growing uncertainly in the world, it said.

The CSRC added that companies will be able to choose listing venues freely as long as they abide by the law. Then regulators would respect their choices, it said.

Chinese offshore listings ground to a halt after Didi Global Inc's New York listing on June 30, 2021 which triggered Beijing's regulatory backlash over data security concerns. Since then, the regulatory uncertainty combined with China's tech crackdown has contributed to a near freeze in overseas listings by Chinese companies.

Allowing overseas listings coupled with the removal of U.S. delisting risks has dealmakers hopeful that Chinese companies will reignite ambitions to list in major markets such as New York.

On Dec. 15, the U.S. accounting watchdog said it had full access to inspect and investigate firms in China for the first time ever, removing the risk that around 200 Chinese companies could be kicked off U.S. stock exchanges.

(Reporting by Samuel Shen, Ella Cao and Liz Lee; Editing by Raissa Kasolowsky)


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