UPDATE 1-Chinese regulator says government policies are not necessarily tied to overseas IPOs
Kelly Choos
2 min read
(Add details, background)
BEIJING, Dec.5 (Reuters) – The Chinese securities regulator said on Sunday that Beijing’s recent policy measures did not target specific industries or private companies and were not necessarily linked to companies seeking to s ‘register in foreign markets.
China has implemented a broad regulatory crackdown https://www.reuters.com/business/china-wall-street-regulatory-crackdown-not-aimed-restricting-private-firms-2021-09-20 over the past recent months against internet companies, for-profit education, and real estate developers, among others.
“The main objective of (these measures) is to regulate the monopoly, protect the interests and data security of small and medium-sized enterprises, as well as the security of personal information,” said the China Securities Regulatory Commission. (CSRC) in a press release. .
The cyberspace regulator had offered companies with more than one million users in China to undergo a security exam before sending user data overseas or registering shares overseas.
Chinese ridesharing giant Didi Global said on Friday it plans to pull out of the New York Stock Exchange, just five months after its debut, and continue listing in Hong Kong.
The Securities Regulatory Commission said it has taken note of new rules put in place by the U.S. Securities and Exchange Commission (SEC) requiring Chinese companies to detail their ownership structure and audits.
Some media outlets claiming that China would likely ban US listing companies with a VIE (Variable Interest Entity) structure is a case of “total misunderstanding and (is) misinterpreted,” the CSRC said.
The VIE structure, widely used by tech companies, was created two decades ago to bypass rules restricting foreign investment in sensitive industries such as media and telecommunications.
The CSRC’s policies are not aimed at cracking down on any specific industry or private companies and “have no necessary connection to overseas business listings,” the commission said.
He said the commission learned that some Chinese companies are actively communicating with domestic and foreign regulators to go public in the United States. The CSRC will respect the choice of listing companies on the basis of compliance, he said.
The securities commission said it has had frank and constructive communications with the SEC and the Public Company Accounting Oversight Board and made positive progress in promoting cooperation on some key issues.
He noted, however, that some forces in the United States have “politicized” capital market surveillance and threatened Chinese companies with withdrawing from the country in recent years, which runs counter to the principles of an economy. and hurts global investors, the statement said.
The CSRC said it will continue to communicate with its US counterpart to resolve the remaining issues in the audit and regulatory areas as soon as possible.
(Reporting by Min Zhang, Samuel Shen and Norihiko Shirouzu. Editing by Gerry Doyle and David Evans)
