Yi Huiman, Chairman of the China Securities Regulatory Commission (CSRC) vowed to promote China-U.S. cooperation on audit supervision and accelerate the launch of new overseas listing rules, indicating the country’s strong commitment to clearing any regulatory uncertainties. China’s efforts to smooth the channel for Chinese companies listing overseas will help anchor market expectations and boost investor confidence, though it will take time and effort to totally resolve the audit dispute with United States’ regulators, experts said. The CSRC is trying to reconcile “respecting international practice and abiding by domestic laws and regulations”. Efforts will be made to create a predictable “international regulatory environment for the high-level opening-up of the capital market”, Yi said while addressing the third meeting of the China Association for Public Companies’ Representatives.
The CSRC supports local companies using domestic and overseas markets to develop, and it will speed up efforts to issue new regulations concerning off-shore issuance and listing. On April 2, China announced a draft revision of confidentiality rules for Chinese companies listing overseas, paving the way for China-U.S. cooperation on auditing supervision.
The draft rules scrap a requirement that on-site inspections related to overseas-listed Chinese companies should be mainly conducted by Chinese regulators or rely on their inspection results. Experts said the changes may help mitigate the threat that some U.S.-listed Chinese companies would be delisted over the next two years. In December, the Commission also unveiled draft rules on Chinese companies listing overseas. The rules extended the Commission’s oversight of offshore listings of Chinese companies with variable interest entity (VIE) structures. The VIEs had been used by companies listing on offshore stock markets, primarily in the U.S., to circumvent Chinese rules restricting foreign investment in sensitive industries, the China Daily reports.
