CSRC lowers threshold for Chinese companies seeking listings abroad

The China Securities Regulatory Commission published a new regulation to loosen the requirements for Chinese companies planning to be listed on international stock exchanges, the CSRC said on Thursday.

The regulation will be in effect on Jan 1, 2013.

Compared with the previous regulation, the new rules no longer set minimum requirements for the net asset value, annual net profit and the fundraising amount for Chinese companies planning to be listed abroad.

The new standard will also simplify the application process for companies planning to list abroad.

The regulation aims to ease fundraising pressure on the domestic market and promote the development of small and medium sized enterprises.

According to previous rules, Chinese companies wishing to be listed overseas are required to have a minimum net asset value of 400 million yuan ($64.16 million), an annual net profit of no less than 60 million yuan, and raise a minimum of $50 million through their initial public offering.

The previous restrictions have prevented the majority of Chinese small and medium enterprises from raising capital on international stock exchanges.