China unblocks path to overseas IPOs with new rules starting March 31 to help companies raise global capital
- Under new rules companies can choose which overseas markets they want to list in but must register their intention with the CSRC in advance
- In addition, companies will also need to get approval from their own industry regulator before listing overseas
China’s regulators have unblocked the path for companies to list overseas, reopening the avenue of fundraising after a 20-month obstruction to enable businesses to recapitalise for growth in the post-Covid period.
Listing applicants must abide by the rules of industry regulators such as the Cyberspace Administration of China (CAC) in their disclosures of customers’ data and anything that could be construed as state secret. The CSRC will block listings that may impede state security, or those that involve companies or shareholders that have committed corruption, bribes or are under investigation.
“Offshore listing is a key component of China’s capital markets opening”, the CSRC said. “The new rules reflect [China’s commitment towards] opening its capital markets and allowing firms to raise funds from international investors to share the growth story of the country”.
The rules would end the mostly unregulated process of Chinese companies’ offshore listings by enacting clear rules, with an overseer.
