China Securities Regulatory Commission (CSRC) will speed up the implementation of a set of policies that supervise overseas share sales of Chinese companies and support qualified companies to go public abroad in an orderly manner, as reported by Reuters on January 18. CSRC Chairman, Yi Huiman, outlined the regulator’s seven priorities for this year, including maintaining steady and healthy development of the capital market, carrying out the registration-based initial public offering (IPO) system, promoting high-quality development of the service economy, propelling institutional opening-up, risk mitigation and disposal in key areas, regulatory transformation, and investor protection.

CSRC released two draft rules for domestic companies pursuing overseas listings last December, which are open for public consultation until January 23, 2022. The draft rules require all Chinese companies to submit applications to the CSRC before they launch overseas listing, while certain companies need to go through relevant security reviews to comply with legal provisions regulating foreign investment, cybersecurity, and data security. Through the establishment of a more transparent governing system, CSRC aims to normalize overseas IPO and refinancing affected by the tightened supervision in 2H21. Last year, a total of 42 Chinese companies completed US IPOs, increasing 20% YoY. However, only four enterprises proceeded with their IPOs in the US in 2H21.

Sources:

https://cn.reuters.com/article/csrc-china-usa-offshore-listing-0117-mon-idCNKBS2JS00L

https://finance.caixin.com/2022-01-17/101831300.html

https://www.china-briefing.com/news/china-spells-out-rules-for-overseas-ipos-of-domestic-companies-vie/

https://global.chinadaily.com.cn/a/202201/17/WS61e4c379a310cdd39bc815c4_1.html