Chinese regulator says government policies are not necessarily linked to foreign IPOs by Reuters

BEIJING (Reuters) – China’s securities regulators said on Sunday that Beijing’s latest policy moves were not aimed at specific industries or private companies, and were not necessarily linked to companies seeking to be listed in foreign markets.

China has imposed heavy regulation on https://www.reuters.com/business/china-wall-street-regulatory-crackdown-not-aimed-restritting-private-firms-2021-09-20 education and real estate developers, among others.

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

Cyberspace regulators have proposed a security review to companies with more than one million users in China before sending user-related data abroad or listing shares abroad.

Chinese travel giant Didi Global said on Friday it planned to pull it out of the New York Stock Exchange in less than five months after making its debut, and to join the Hong Kong list.

The Securities Regulatory Commission said it had complied with the new rules set by the U.S. Securities and Exchange Commission (SEC) by requiring Chinese companies to determine ownership structures and audits.

Some media reports that China is likely to ban companies with a VIE (Variable Interest Entity) structure from the U.S. list are “completely misunderstood and (is) a misreading,” the CSRC said.

The VIE structure, widely used by technology companies, was created two decades ago to circumvent rules that limit foreign investment, such as in the sensitive media and telecommunications industries.

CSRC policies do not oppress specific industries or private companies and “do not have the necessary connection to foreign business listings,” the commission said.

He said the commission was aware that some Chinese companies are actively communicating with domestic and foreign regulators to market in the United States. The CSRC will respect the choice of company listing places based on compliance, he said.

The Securities and Exchange Commission said it has made honest and constructive communications with the SEC and the Public Business Accounting Commission, and has made positive progress in promoting cooperation on a number of key issues.

However, he noted that some US forces have “politicized” capital market oversight and threatened to remove Chinese companies from the country in recent years, which is contrary to market economy principles and harms global investors, the statement said.

The CSRC said it would continue to communicate with its U.S. counterpart to resolve remaining issues in the areas of audit and regulation as soon as possible.