China demands more from firms plotting overseas listings
China’s financial watchdog laid out a raft of new oversight provisions yesterday, tightening rules on firms plotting overseas listings.
The China Security Regulatory Commission (CSRC) plans to expand its oversight of offshore listings to those firms using variable interest entity structures, popular with firms who have undertaken recent overseas listings.
The CSRC said it was not about “policy tightening” but the move will be seen in the context of a wider crackdown on Chinese firms looking for international finance.
Ride-hailing firm Didi recently announced plans to delist from the New York Stock Exchange just months after a bumper Wall Street IPO.
The announcement came after reports that the CSRC had asked the firm to come up with plans to do so.
Didi will now list in Hong Kong.
Variable interest entity structures effectively allow Chinese firms to set up foreign subsidiaries which can then be listed in those jurisdictions.
The new rules will allow the regulator to dispose of its assets or offshore businesses on national security grounds.