China to close the gap used by technology companies for foreign IPOS

China to close the gap used by technology companies for foreign IPOS

China to close the gap used by technology companies for foreign IPOS
                                                                            Photo from Internasional kontan      

China plans to ban public companies in foreign stock markets through varying interest entities, depending on those familiar with the issue, closing a long gap used by the country's technology industry to raise capital. Investors abroad.


The prohibition, partly planned to address the concerns regarding data security, is included in the amendments included in the new Chinese anniversary rules project that could be finalized as soon as this month, said the people, who asks not to be identified to discuss private information. Companies using the so-called-life structure would always be allowed to pursue initial public offers in Hong Kong, subject to regulatory approval, people reported.


Businesses currently listed in the United States and Hong Kong who use lives should make adjustments so that their property structures are more transparent in regulatory reviews, particularly in the areas of foreign investment boundaries, said people. We do not know if this would mean a redesign of shareholders or, more radically, a cancellation of the most sensitive companies - movements that could revive the fears of decoupling between China and the United States in areas such as the technology. The details of the proposed rules are still under discussion and could change.


The redesign would be one of the main stages of Beijing to crack on lists abroad as a result of the New York IPO of Ride-Haling Giant Didi Global Inc., which despite regulatory concerns. The authorities have since been displaced quickly to end the flooding of companies seeking to become public in the United States, clogging a path that generated billions of dollars for technology companies and their Wall Street servers.


All of this is part of a frequent campaign to curb the growth of the Breakneck of the Internet sector of China and what Beijing called for an "imprudent" expansion of private capital. The prohibition of foreign lists's lives would close a gap that has been used for two decades by technological giants of Alibaba Group Holding Ltd. at Tencent Holdings Ltd. SIDSEP restrictions on foreign investment and offshore list. This potentially opposes the ambitions of companies such as Bytitedance Ltd. considering making the public outside the continent.


The China's Securities Regulatory Commission did not immediately respond to a request for comments.


Although a universal prohibition of the life structure is not considered, a stop on foreign lists and an additional review for Hong Kong IPOS would mean that the model would no longer be a viable way for many startups to exploit capital markets. Some investment banks have already been informed by the regulators to stop working on new transactions involving lives, a person familiar with the question said.


The disappearance of the road of life would further threaten a lucrative line of activity for Wall Street Banks, who helped nearly 300 Chinese companies would increase about $ 82 billion through the first sale of shares at the USAD during the last decade.


Lives have been a sustainable concern for global investors given their fragile legal status. Pioneer by Sina Corp. And its investment bankers during a 2000 stock market introduction, the life framework has never been officially approved by Beijing.


It has nevertheless allowed Chinese companies to circumvent the rules on foreign investment in sensitive areas, including the Internet industry. The structure allows a Chinese company to transfer benefits to an offshore entity - recorded in locations such as the Cayman Islands or the British Virgin Islands - with actions that foreign investors can then possess.


While virtually all major Chinese Internet companies have used the structure, it has become increasingly worrying for Beijing after technology companies have infiltrated all corners of Chinese life and racking consumption dates. Companies holding data from more than one million users need to be approved when searching for lists from other countries, the China Cyberspace Administration has declared in July.


A review of cybersecurity may also be required for IPOS business planning in Hong Kong if it is decided that the list will potentially impact national security. Change did not prevent data rich in data such as music streaming venture cloud cloud village Inc. and artificial intelligence Giant Senstetime Group Inc. of planning debut in the city.


Until recently, the authorities have had little legal remedies to prevent sensitive lists abroad, as with the IPO Didi. The officials asked the Giant Halk-Harning design a United States delist plan, familiar people reported the last week, an unprecedented request.


Given that repression on Didi began in early July, a single Chinese company based on the inhabitants of the hand has cost an American stock-market introduction, while 29 of listed shares in Hong Kong, according to the data. Compiled by Bloomberg. Netease Inc.'s Cloud Village will be debuting Thursday, while the closely observed sensitivity offer should begin to negotiate in the week of December 13th.


A high regulator manager announced last week that China fully supports companies that choose Hong Kong as the main location of the list. China does not think that US radiation is a good thing for businesses, for global investors or China-U.S. Relationship, said Shen Bing, Director General of the CSRC Department of Affairs.


Increased regulatory monitoring of China has been rezoned to the United States the Securities and Trade Commission stopped pending the IPOS by Chinese companies until complete information about policy risks and regulation be made, investors warn may not be aware that they actually buy Shell shares instead of guidelines. Issues in companies.

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