SYDNEY/HONG KONG : New rules laying out how Chinese companies can list outside mainland China will often mean getting a nod from several domestic government agencies, potentially making for a lengthy approval process, investment bankers say.On one hand, the rules provide clarity after a regulatory crackdo
SYDNEY/HONG KONG : New rules laying out how Chinese companies can list outside mainland China will often mean getting a nod from several domestic government agencies, potentially making for a lengthy approval process, investment bankers say.
"It's not exciting news because now you need to go through some additional, complicated procedures," said Guo Yi, chief operating officer at Univest Securities, a boutique investment bank that helps Chinese firms list in New York. Under the new rules, a host of government authorities would become involved in approving applicants looking to raise capital via the popular VIE route, said Winston Ma, an adjunct professor at NYU Law School.
The involvement of more regulators beyond the CSRC could also lead to more uncertainty around approval as some agencies could have different priorities such as national security or data protection, bankers said.New York for decades had been a lucrative listing venue for Chinese companies attracted to its deep liquidity and the prestige of a share sale in the world's largest economy.
Enacted in the wake of the Didi debacle, current rules also require companies with data of more than 1 million customers to undergo a review by the CAC before they can sell shares overseas.
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