CSRC releases new overseas listing regulations

China Securities Regulatory Commission, the country's top security watchdog, released on Friday the new management regulations for Chinese companies' overseas listing and securities issuance.

Made up of 35 detailed measures, the regulations aim to optimize the supervision system, further clarify the requirements to record overseas listing cases with Chinese regulators, strengthen cross-border securities supervisory cooperation, clarify the legal responsibilities - especially those for law violations - and better meet companies' financing demand by relaxing certain limits for eligible companies.

In specific, a negative list mechanism has been introduced to clarify cases not qualified for overseas listing.

The standards for indirect overseas listings have been specified under the new regulations.

For indirect listing in the overseas market, an overseas company will take a controlling stake in a domestically registered Chinese firm and the former will go public in an overseas exchange. Direct overseas listing usually refers to initial public offering.

For companies with a variable interest entity structure, in which a Chinese business sets up an offshore holding company with its domestic business controlled via various contracts, the qualified ones will be supported to go public overseas by putting on records with the domestic regulations in advance, according to the regulations.

The new regulations will take effect on March 31 with another five sets of guidelines.

Companies already listed on overseas exchanges by that time are not required to submit any records with the Chinese regulators until they have successive refinancing demand.

A six-month transition will be given to domestic enterprises that have obtained the approval of overseas regulatory bodies or exchanges since implementation date of the new regulations but have not completed the indirect overseas listing. If they fail to complete the overseas listing within six months, they should file records according to the requirements.

The CSRC officials said that the new regulations are introduced to address the changing international environment and mounting market uncertainties. China will continue to open up and encourage companies to better use the onshore and offshore market resources.