HONG KONG (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 here 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 home amid tighter checks in the United States - another top destination for offshore floats.
The proposed changes are part of China's months-long crackdown here on private firms to rein in "disorderly expansion of capital" that has involved behemoths like Alibaba, Ant Group and ride-hailing giant Didi.
There is no timeline for the unveiling of the new guidelines, the sources added.
CSRC did...
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