Business

China’s regulator says the government’s guidelines are not necessarily linked to foreign IPOs




BEIJING, December 5 (Reuters) – China’s securities regulator said on Sunday that Beijing’s recent policy measures were not aimed at specific industries or private companies, and were not necessarily linked to companies wishing to list in foreign markets.

In recent months, China has implemented extensive regulatory work with, among others, Internet companies, for-profit education and real estate developers.

“The main purpose of (these features) is to regulate monopolies, to protect the interests and data security of small and medium-sized enterprises, as well as personal information security,” the China Securities Regulatory Commission (CSRC) said in a statement.

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The cyberspace regulator had suggested that companies with more than one million users in China should undergo a security review before sending user-related data abroad or listing shares abroad. read more

Chinese giant Didi Global (DIDI.N) said on Friday that it plans to delist from the New York Stock Exchange, just five months after its debut, and pursue an IPO in Hong Kong. read more

The Securities and Exchange Commission said it had taken note of new rules released by the US Securities and Exchange Commission (SEC) asking Chinese companies to detail their ownership structure and audits. read more

Some media reports that China is likely to exclude companies with a VIE (Variable Interest Entity) structure from US listing are a case of “total misunderstanding and (er) misreading”, the CSRC said.

The VIE structure, which is widely used by technology companies, was created two decades ago to circumvent rules restricting foreign investment in sensitive industries such as the media and telecoms.

The CSRC guidelines are not intended to discriminate against specific industries or private companies and “have no necessary links with companies’ foreign listings,” the commission said.

It said the commission had been told that some Chinese companies were actively communicating with domestic and foreign regulators to get listed in the United States. CSRC will respect companies’ choice of listing locations on the basis of compliance, it says.

The Securities Commission said it had had an honest, constructive communication with the SEC and the Public Company Accounting Oversight Board, and has made positive progress in promoting cooperation on some important issues.

However, it noted that some forces in the United States have “politicized” capital market supervision and threatened Chinese companies to remove listing from the country in recent years, which goes against the principles of a market economy and harms global investors, according to the statement.

The CSRC said it would continue to communicate with its US counterpart to address remaining auditing and regulatory issues as soon as possible.

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Reporting by Min Zhang, Samuel Shen and Norihiko Shirouzu. Edited by Gerry Doyle and David Evans

Our standards: Thomson Reuters Trust Principles.



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