On December 24, the CSRC publicly solicited opinions on the systems and rules related to overseas listing. The specific rules include the administrative provisions of the State Council on the overseas issuance and listing of securities by domestic enterprises (Draft for comments) (hereinafter referred to as the administrative provisions) and the administrative measures for the filing of overseas issuance and listing of securities by domestic enterprises (Draft for comments) (hereinafter referred to as the filing method), which shall be submitted to the public for comments.
Specifically, the key contents include:
1. The direct and indirect overseas listing activities of domestic enterprises shall be subject to unified filing management, and the overseas issuance and listing of domestic enterprises shall perform the filing procedures.
2. Establish a regulatory coordination mechanism for overseas listing of domestic enterprises and strengthen regulatory coordination; Mechanisms such as overseas listing filing management and safety review shall be well connected.
3. We will improve cross-border securities regulatory cooperation arrangements and establish mechanisms such as filing and information notification.
4. For the four types of situations where laws and regulations explicitly prohibit listing and financing, endanger national security, there are major ownership disputes, and there are illegal and criminal acts, it is clear that overseas listing is not allowed. No additional thresholds and conditions shall be set to support legally compliant domestic enterprises to use overseas capital markets for financing development
5. Clarify the legal responsibility for non-compliance with filing procedures, counterfeiting of filing materials and other violations, and increase the cost of violations.
6. Combined with the practice of expanding the opening of the capital market and the needs of supporting enterprise development, it is clear that under the circumstances of equity incentive, overseas direct issuance and listing can be issued to specific domestic entities.
7. The integrated filing management is applicable to the “full circulation” business of overseas direct listing to further facilitate the “full circulation”.
8. Relax the currency restrictions on overseas fund-raising and dividend distribution to meet the needs of enterprises to raise RMB abroad.
promote enterprises to carry out overseas listing activities in accordance with laws and regulations
The relevant person in charge of the CSRC said that opening to the outside world is China’s basic national policy. In recent years, the capital market has been steadily opening to the outside world. The number of entrepreneurs listed abroad in direct and indirect forms is increasing, covering many overseas markets such as Hong Kong, New York and London. Overseas listing has played a positive role in supporting Chinese enterprises in utilizing foreign capital, improving corporate governance and deeply integrating into the world economy. Overseas listed enterprises have made positive contributions to the national economic and social prosperity and development. Domestic and foreign investors have also shared the dividends of China’s long-term and stable economic development through investing in listed enterprises.
Improving the supervision system of overseas listing of enterprises is put forward under the background of deepening the opening-up of the capital market. The purpose of standardization is to promote healthier, more sustainable and more long-term development. At present, the legal basis for regulating the overseas listing activities of enterprises 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, hereinafter referred to as the special provisions), which is scheduled for the early stage of the development of China’s capital market and has generally lagged behind the market practice, It can not well meet the needs of market development and high-level opening to the outside world. In December 2019, the newly revised Securities Law of the people’s Republic of China (hereinafter referred to as the Securities Law) made it clear that direct and indirect overseas listing should comply with the relevant provisions of the State Council. Enterprises, intermediaries, domestic and foreign investors and other market entities pay great attention to the improvement and reform of the overseas listing supervision system, and expect the state to introduce system rules as soon as possible, further clarify procedures and requirements, and promote enterprises to carry out overseas listing activities in accordance with the law and regulations.
The above-mentioned person in charge said that under this background, the CSRC, together with relevant departments, carefully summarized and evaluated the implementation of the special provisions, and put forward working ideas for comprehensively revising the special provisions and uniformly formulating laws and regulations regulating the direct and indirect overseas listing activities of domestic enterprises in view of the shortcomings of the current system and the actual needs of market development, The administrative regulations and the supporting filing measures have been drafted and formed.
The relevant person in charge of the CSRC said that in the next step, after performing the legislative procedures such as public solicitation of opinions, when the relevant systems and rules are officially released and implemented, the CSRC will also formulate guidelines for the release of filing, further refine the specific arrangements for filing management, and ensure that market subjects have a clear rule basis when handling filing.
the direction of expanding the opening of the capital market will not change
The relevant person in charge of the CSRC said that improving the supervision system for overseas listing of enterprises is not only a practical measure to help build a new international and Chinese dual cycle development pattern, but also reflects China’s firm determination to deepen the reform of “decentralization, management and service” and promote the expansion and opening of the capital market.
First of all, this is the need to support enterprises to use overseas capital markets for financing and development in accordance with the law and regulations. The attitude of the CSRC and relevant competent authorities to respect the legal compliance of enterprises and independently choose the place of listing is consistent and clear, and has never wavered. Looking ahead, the direction of expanding opening up will not change, and the attitude of supporting enterprises to make good use of the two resources will not change. Improving the regulatory system for overseas listing of enterprises is not a tightening of regulatory policies for overseas listing. The CSRC will continue to seek development in opening up and promote development in standardization, maintain smooth overseas financing channels, provide clear, transparent and operable rules for overseas listing activities of enterprises, and build a more stable and predictable institutional environment.
Secondly, this is the need to promote institutional high-level opening to the outside world. As an important part of the two-way opening of China’s capital market, overseas listing should reflect the requirements of high-quality development. No matter where the enterprise is listed, compliance with national laws and regulations is the most basic requirement. In recent years, some overseas listed enterprises have committed serious violations such as financial fraud, which has damaged the overall international image of Chinese enterprises and adversely affected the overseas financing of Chinese enterprises. Improving the regulatory system for overseas listing of enterprises, coordinating openness and security, and improving the overall compliance level of overseas listing of Chinese enterprises will not only help give better play to the positive role of overseas listing in promoting scientific and technological progress, supporting enterprise development and participating in international competition, but also help protect the legitimate rights and interests of domestic and foreign investors, Promote the standardized, healthy and orderly development of overseas listing activities of enterprises.
Third, this is the need to deepen the reform of “release, management and service” of overseas listing supervision. In recent years, the CSRC has actively promoted the reform of “release management service” of Overseas Listing Supervision, streamlined the application documents and audit contents, significantly shortened the audit cycle, and achieved good results. On the basis of the current practice of Overseas Listing Supervision, the filing management will adhere to the principle of “openness, manageability and good service”, and will not review whether the enterprises meet the conditions for issuing and listing in the place of overseas listing, nor do they conduct disguised examination and approval. It will focus on strengthening domestic and foreign regulatory cooperation, compacting the responsibilities of market subjects, liberalizing and invigorating while standardizing management, So that the reform of “release, management and service” of overseas listing supervision can be implemented for a long time and bear fruit.
implement unified filing management for direct and indirect overseas listing activities of domestic enterprises
The management regulations consists of five chapters and 28 articles. The main contents are as follows: first, improve the supervision system. The direct and indirect overseas listing activities of domestic enterprises shall be subject to unified filing management. Second, strengthen regulatory coordination. Establish a regulatory coordination mechanism for overseas listing of domestic enterprises and strengthen regulatory coordination; Make good connection between overseas listing filing management and safety review mechanisms; We will improve cross-border securities regulatory cooperation arrangements and establish mechanisms such as filing and information notification. Third, clarify the legal responsibility. Clarify the legal responsibility for non-compliance with filing procedures, counterfeiting of filing materials and other violations, and increase the cost of violations. Fourth, enhance institutional inclusiveness. Combined with the practice of expanding the opening of the capital market and the needs of supporting enterprise development, it is clear that under the circumstances of equity incentive, overseas direct issuance and listing can be issued to specific domestic entities; Further facilitate “full circulation”; Relax the currency restrictions on overseas fund-raising and dividend distribution to meet the needs of enterprises to raise RMB abroad.
There are 24 articles in the filing measures of the CSRC. The main contents are as follows: first, clarify the scope of application of filing management and relevant recognition standards. Second, clarify the filing subject and filing procedures. Third, clarify the reporting requirements for major events and strengthen the supervision during and after the event. Fourth, clarify the filing requirements of overseas securities companies.
The CSRC said that the direction of the state’s expansion of capital market opening to the outside world will not change, and the attitude of supporting enterprises to list abroad in accordance with the law and make good use of the two resources will not change. The purpose of the regulation is to promote development.
make it clear that the transitional period arrangement law is not retroactive
In order to ensure the smooth and orderly implementation of overseas listing filing management, the CSRC has set up transitional arrangements. The CSRC will adhere to the principle of non retroactivity of the law, adhere to the principle of keeping the word first and seeking progress while maintaining stability, and ensure the smooth implementation of filing management.
In terms of system design, it is mainly reflected in the following aspects: first, start from increment. For incremental enterprises and stock enterprises with refinancing activities, perform filing procedures as required; The filing of other stock enterprises will be arranged separately to give a sufficient transition period. Second, distinguish between IPO and refinancing. Fully considering the characteristics of convenient and efficient refinancing in the overseas market, differentiated institutional arrangements have been made for refinancing in terms of filing time, filing material requirements, etc., which are well connected with the practice of the overseas market, so as to reduce the impact on the financing activities of overseas listed enterprises.
the process is clear: the CSRC will issue a filing notice within 20 working days
According to the regulations, the CSRC’s filing management will focus on the compliance of domestic enterprises, follow the necessary and reasonable principles, set filing procedures and material requirements, avoid excessive burden on enterprises, and the filing management will be more efficient and convenient than the current administrative license.
According to the requirements of the filing management system, enterprises must submit explanations on key compliance matters, and intermediaries must issue necessary verification opinions. If the filing materials are complete and meet the specified requirements, the CSRC shall issue a filing notice within 20 working days. If the CSRC considers that the information reflected in the materials is incomplete and insufficient, it will require the enterprise to make supplementary explanations. According to the situation reflected in the enterprise materials, the CSRC shall solicit the opinions of relevant competent departments as necessary. The time for Soliciting Opinions shall not be counted within the filing time limit, and the solicitation of opinions will be fed back to the applicant in time.
domestic multi departments establish a regulatory cooperation mechanism to reduce the regulatory burden of enterprises
According to the relevant person in charge of the CSRC, in order to ensure the smooth implementation of filing management, the CSRC will establish a regulatory cooperation mechanism with the competent departments of relevant industries and fields in China, strengthen policy convergence, information sharing and regulatory coordination, and will not require enterprises to take “road signs” and run for approval in multiple departments, so as to reduce the regulatory burden of enterprises as much as possible.
First of all, if the competent department in a specific industry clearly requires the enterprise to perform the regulatory procedures before listing abroad by system rules, the enterprise shall obtain the regulatory opinions, filing or approval documents issued by the competent department before submitting the filing application. For example, according to the measures for the implementation of administrative licensing matters of Chinese funded commercial banks and other provisions, Chinese funded commercial banks must perform the approval procedures of the competent banking department before listing abroad.
Secondly, according to the administrative provisions, the CSRC will take the lead in establishing a cross departmental supervision and coordination mechanism for overseas listing of enterprises, and take the initiative to strengthen communication or solicit opinions with relevant competent departments after receiving the enterprise filing application materials, so as to improve the filing efficiency. At the same time, the CSRC will cooperate and promote relevant competent departments to clarify the regulatory systems and rules in relevant fields and improve the predictability of policies.
Finally, for overseas listing of enterprises involved in foreign investment security review, network security review and other laws and regulations, before submitting the filing application, the enterprise shall apply for security review according to law.
improve cross-border securities regulatory cooperation arrangements in three aspects
Relevant person in charge of the CSRC said that in today’s highly globalized capital market, national regulators need to strengthen regulatory cooperation and policy communication. The CSRC will further promote the improvement of cross-border securities regulatory cooperation arrangements with securities regulators in major overseas markets. First, establish a filing information notification mechanism with overseas securities regulatory institutions to strengthen the sharing of overseas listing regulatory information. Second, strengthen cross-border law enforcement cooperation, jointly crack down on corporate financial fraud and other illegal acts, maintain market fairness and order, and protect the legitimate rights and interests of investors. Third, actively promote cross-border audit and regulatory cooperation and create a good regulatory environment for overseas listing of enterprises.
In addition, on the premise of complying with domestic laws and regulations, vie structure enterprises that meet the compliance requirements can be listed abroad after filing.
full text of opinions
CSRC solicits public opinions on relevant systems and rules of overseas listing
official Q & A
CSRC: Vie structured enterprises that meet the compliance requirements can be listed overseas after filing
core points
CSRC: improving the supervision system of overseas listing of enterprises is not to tighten the supervision policy of overseas listing
CSRC: improving the supervision system of overseas listing of enterprises is the need to promote institutional high-level opening to the outside world
CSRC: will actively promote cross-border audit and supervision cooperation
CSRC: overseas listing filing management adheres to the principle of non retroactivity
CSRC: domestic enterprises issuing and listing overseas shall strictly abide by national security laws, regulations and relevant provisions such as foreign investment, network security and data security, and earnestly perform the obligation of national security protection
analysis and interpretation
Heavy! The threshold for CDR individual investors is proposed to be RMB 500000, and it takes three years for enterprises to be listed abroad
The rules for overseas listing of enterprises have come and need to be filed with the CSRC! Eight key points of allowing vie structured enterprises to be listed
Heavy! Seven key points to see the new regulations for overseas listing! Domestic enterprises directly and indirectly listed overseas implement filing management, and enterprises in compliance with vie framework can also list overseas after filing
Heavy! Soliciting opinions on the new regulations for overseas listing is not tightening! Vie structure enterprises that meet the compliance requirements can be listed abroad after filing
(Securities Times)
