On December 24, China Securities Regulatory Commission published the State Council’s regulations on the administration of overseas securities issuance and listing of domestic enterprises (Draft for comments) and the supporting measures for the administration of overseas securities issuance and listing filing of domestic enterprises (Draft for comments), soliciting opinions from the public, further improving the supervision system of overseas listing of enterprises, and attracting great attention from the market.
For some time, affected by various factors, the China concept stock market has experienced a sharp decline, the market has unstable expectations for overseas listing activities, and even worried about the state’s restrictions on overseas listing. Relevant systems and rules solicited public opinions, clarified regulatory policies, improved the system and dispelled market doubts. Opening to the outside world is China’s basic state policy. Overseas listing has played a positive role in supporting enterprises to use foreign capital, improve corporate governance and deeply integrate into the world economy. Domestic and foreign investors have also shared the dividends of China’s long-term and stable economic development through investing in listed enterprises. The introduction of the new regulations once again shows that the direction of China’s expansion of opening-up will not change, and the attitude of supporting enterprises to legally comply with overseas listing will not change.
Overseas listing must comply with Chinese laws and regulations, as well as the rules of overseas listing places, which is the internal requirement of institutional high-level opening to the outside world. For a long time, there are still some shortcomings in China’s supervision of overseas listing of enterprises, and the relevant management regulations can not fully meet the needs of market development and expanding opening to the outside world. The current legal basis for regulating overseas listing activities of enterprises in China is mainly the special provisions of the State Council on overseas share offering and listing of joint stock limited companies (Order No. 160 of the State Council) in 1994, which was formulated in the early stage of the development of China’s capital market. In practice, there have been serious violations of laws and regulations by individual overseas listed enterprises, which has damaged the overall international image of Chinese enterprises, It has had an adverse impact on overseas financing of Chinese enterprises. It is absolutely necessary to comprehensively revise the overseas listing rules according to the actual situation of market development.
The purpose of improving the supervision system of overseas listing of enterprises this time is to seek development in opening up and promote development in standardization, not to tighten the supervision policy of overseas listing. The new regulations will provide clearer, transparent and operable rules for overseas listing activities of enterprises, maintain smooth overseas financing channels, promote enterprises to carry out overseas listing activities in accordance with laws and regulations, and achieve healthier and more sustainable development.
This time, we will improve the supervision system for overseas listing of enterprises, uniformly implement the filing management for direct and indirect overseas listing activities of enterprises, and enhance the inclusiveness of the system. In terms of system implementation, it reflects the principle of seeking progress while maintaining stability, starts with increment, and gives sufficient transition period to stock enterprises to ensure the smooth implementation of filing management. At the same time, the new regulations clearly strengthen domestic and foreign regulatory cooperation, compact the responsibilities of market subjects, release and enliven while standardizing management, do not review whether enterprises meet the conditions for issuance and listing in overseas listing places, nor do they conduct disguised approval, which reflects the reform spirit of “releasing regulatory services”.
This time, the regulatory system for overseas listing of enterprises was improved, a negative list was given, and a “traffic light” was clearly set up, which made it clear that the listing and financing prohibited by laws and regulations, threatening or endangering national security, major ownership disputes, illegal and criminal acts and other situations could not be listed overseas, and the agreement control (VIE) framework enterprises meeting the compliance requirements could be listed overseas after filing. These Provisions address the key concerns and doubts of the market and are conducive to building a more stable and predictable institutional environment for overseas listing activities of enterprises.
The improvement of the supervision system for overseas listing of enterprises is an important measure for China to deepen the two-way opening of the capital market. The purpose of the reform is to continue to vigorously support the development of overseas financing of enterprises. Clarifying the “impossible” field of overseas listing is an effective means of overall opening and security, which will help promote enterprises to list abroad in accordance with laws and regulations. The policy will greatly improve the overall compliance level of overseas listing of Chinese enterprises, give better play to the positive role of overseas listing in promoting scientific and technological progress, supporting enterprise development and participating in international competition, promote the standardized, healthy and orderly development of overseas listing activities of enterprises, and effectively protect the legitimate rights and interests of investors at home and abroad.
The improvement of the overseas listing system reflects the policy direction of marketization, legalization and internationalization. It will effectively play the role of the rule of law in consolidating the foundation, stabilizing expectations and benefiting the long-term. It will hedge the uncertainty of the external environment with the certainty of the system, which fully reflects China’s firm determination to pay equal attention to standardization and development and further expand the opening of the capital market.
(Economic Daily)
