Home Markets China’s offshore listing rules should reduce market uncertainty

China’s offshore listing rules should reduce market uncertainty


HONG KONG, Dec 25 (Reuters) – China’s plan to tighten scrutiny over mainland companies’ offshore share sales should help reduce the regulatory uncertainty that roiled financial markets this year and stalled offshore listings, according to bankers and analysts.

The China Securities and Regulatory Commission (CSRC) published draft rules late on Friday requiring filings by companies seeking offshore listings under a framework to ensure they comply with Chinese laws and regulations.

Companies using a so-called variable interest entity (VIE) structure will still be allowed to seek offshore listings as long as they are compliant.

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The rules remove uncertainty for investors who had feared that authorities would block offshore listings of VIE-structured companies to plug a regulatory loophole.

VIE is a structure adopted by most overseas-listed Chinese tech companies, such as Alibaba and JD.com, to skirt…

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