A Chinese national flag flutters outside the China Securities Regulatory Commission (CSRC) building on the Financial Street in Beijing, China July 9, 2021. REUTERS/Tingshu Wang/File Photo
- CSRC drafting new IPO approval rules for overseas listings
- Rules to not exclude Hong Kong listings of VIE-structured companies
- Hong Kong favoured listing venue as US IPO attempts stymied by regulators
HONG KONG, Sept 10 (Reuters) - China's securities regulator is looking to expand its scrutiny of overseas listings by offshore incorporated companies to include initial public offerings (IPO) in Hong Kong, five people with knowledge of the matter said.
The China Securities Regulatory Commission (CSRC) has already been setting up a team to focus on companies seeking to list offshore using the so-called variable interest entity (VIE) corporate structure which Beijing says has led to abuse.
But some market participants had not expected the scrutiny to be extended to such firms seeking to list in the Chinese territory of Hong Kong - a preferred venue for companies in the world's second-largest economy to raise capital offshore.
However, under the new rules being drafted, CSRC will not exclude Hong Kong-bound Chinese companies with a VIE structure from seeking approval, the people told Reuters on condition of anonymity given the sensitivity of the change.
The move would not augur well for the Asian financial hub as it may make it more challenging for Chinese firms looking for a venue closer to...
Read Full Story: https://www.reuters.com/business/chinese-firms-with-offshore-structure-need-approval-hong-kong-ipos-sources-2021-09-10/
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