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China still allows IPOs in the United States, the Securities Regulatory Commission said

Electric car maker NIO’s vehicle is outside the New York Stock Exchange (NYSE) in New York City on September 12, 2018.

Drew Angeler | Getty Images News | Getty Images

Chinese securities regulators will continue to allow listings in the United States as long as Chinese companies meet listing requirements, Chinese securities regulators told securities firms late Wednesday.

A series of regulatory measures over the past few weeks has raised investor concerns that Beijing is trying to stop the influx of foreign capital into Chinese assets.

Citing regulators, cross-border stock listings can also be done using the structure of variable interest entities, sources said.This refers to the legal structure that gives international investors access to the shares of Chinese companies in the United States.

Regulators recognized the structure as an important way for businesses to attract foreign capital, but said they needed to adjust if there were national security concerns.

Fang Xinghai, vice chairman of the China Securities Regulatory Commission, held a virtual meeting with major investment banks on Wednesday, sources said. It followed days of soaring Chinese stocks for fear of increased regulatory crackdowns by Beijing.

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This policy encourages leading companies to raise funds through the stock market and hire foreign investors, especially through the legal structure of variable interest entities that allow international investors access to Chinese equities. Banned.

The speed and breadth of the policy surprised many. Goldman Sachs downgraded China’s education stocks on Monday in hopes of a “significant contraction” in the after-school tutoring market — less than a quarter of its current $ 106 billion size.

However, Mr. Fang of the Securities Commission said the policy is aimed at reducing the burden on parents rather than blocking foreign investment, and education companies will spend as much time as necessary for restructuring. rice field.

Securities regulators did not immediately respond to CNBC’s request for comment.

China still allows IPOs in the United States, the Securities Regulatory Commission said

Source link China still allows IPOs in the United States, the Securities Regulatory Commission said

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