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China regulator says govt policies not necessarily linked to overseas IPOs

EconomyDec 05, 2021 07:40AM ET
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2/2 © Reuters. A sign of Chinese ride-hailing service Didi is seen at its headquarters in Beijing, China July 5, 2021. REUTERS/Tingshu Wang 2/2

BEIJING (Reuters) -China's securities regulator said on Sunday that Beijing's recent policy moves were not aimed at specific industries or private firms, and were not necessarily linked to companies seeking to list in overseas markets.

China has implemented a sweeping regulatory crackdown https://www.reuters.com/business/china-wall-street-regulatory-crackdown-not-aimed-restricting-private-firms-2021-09-20 in recent months on internet companies, for-profit education, and real estate developers, among others.

"The main purpose of (those moves) is to regulate monopoly, to protect the interests and data security of small- and medium-sized firms, as well as personal information security," the China Securities Regulatory Commission (CSRC) said in a statement.

The cyberspace regulator had proposed companies with more than one million users in China undergo a security review before sending user-related data abroad or listing shares overseas.

Chinese ride-hailing giant Didi Global said on Friday it planned to delist from the New York Stock Exchange, just five months after its debut, and pursue a Hong Kong listing.

The securities regulatory commission said it had taken note of new rules rolled out by the U.S. Securities and Exchange Commission (SEC) asking Chinese companies to detail their ownership structure and audits.

Some media reports stating that China will likely ban companies with a VIE (Variable Interest Entity) structure from U.S. listing is a case of "total misunderstanding and (is) misreading", the CSRC said.

The VIE structure, used widely by tech firms, was created two decades ago to circumvent rules restricting foreign investment in sensitive industries such as media and telecoms.

The CSRC policies are not meant to crack down on specific industry or private firms and "have no necessary connections with companies' overseas listings," the commission said.

It said the commission had learnt some Chinese companies are actively communicating with domestic and foreign regulators to go public in the United States. The CSRC will respect firms' choice of listing venues on the basis of compliance, it said.

The securities commission said it has held candid, constructive communications with SEC and the Public Company Accounting Oversight Board, and has achieved positive progress in promoting cooperations on some key issues.

It noted, however, that some forces in the U.S. have "politicized" capital market supervision and threatened Chinese companies to delist from the country in recent years, which goes against principles of a market economy and hurts global investors, according to the statement.

The CSRC said it will continue to communicate with its U.S. counterpart to resolve remaining issues in audit and regulatory areas as soon as possible.

China regulator says govt policies not necessarily linked to overseas IPOs
 

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Comments (12)
derek wlokosky
derek wlokosky Dec 05, 2021 10:47PM ET
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let's go NIO
Kaveh Sun
Kaveh Sun Dec 05, 2021 11:58AM ET
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Here is communist capital: u r allowed to do business only. If they think they loose control on ur company, they will gut u.
Kaveh Sun
Kaveh Sun Dec 05, 2021 11:55AM ET
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They dont care if it is listed or not. It is all about control. Ccp does not want to loose control or any foreign influence their companies period.
simon Truong
simon Truong Dec 05, 2021 9:27AM ET
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Loaded NIO last couple days, hope it will fly next week.
Sean Livingstone
Sean Livingstone Dec 05, 2021 9:04AM ET
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Wall Street made used of media to spread fake news, to pull down China stocks. China regulators never once say they are going to ban VIEs. They only allow compliant VIEs to move ahead... which is a good thing, don't you all think so?
Vidyashaharan Shanmuganathan
Vidyashaharan Shanmuganathan Dec 05, 2021 8:42AM ET
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All chinese stocks will be markedly up.
Jan Chojnacki
Jan Chojnacki Dec 05, 2021 7:08AM ET
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PDD, tigr, baba up
Michael Mcdonough
Michael Mcdonough Dec 05, 2021 7:08AM ET
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Its called the rules of accounting..either you play fair and transparent or you don’t…if not investors will vote with their feet..per BABA dropping 33percent in ONE MONTH.
Shai Berkovitz
Shai Berkovitz Dec 05, 2021 6:55AM ET
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chinese stocks will be up tomorrow
Nordin Mohamad
Nordin Mohamad Dec 05, 2021 5:06AM ET
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.... they have bought enough and releasing this news to pushup and cashout ...??? do you buy ccp words..???
Overnight trader
Overnight trader Dec 05, 2021 4:59AM ET
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NIO ALIBABA gonna fly on Monday
Vidya Dhar
Vidya Dhar Dec 05, 2021 4:57AM ET
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Very useful information. Thank you for sharing this article.
 
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