On 17 February 2023, the China Securities Regulatory Commission ("CSRC") published new regulations for the filing-based administration of overseas securities offering and listing by domestic companies, effective from 31 March 2023. The regulations comprise six sets of documents, including the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (境内企业境外发行证券和上市管理试行办法) ("Measures") and five supporting guidelines. The new approach replaces the current approval-based system.
Under the Measures, direct and indirect overseas securities offering and listing activities by domestic companies must comply with the filing requirements. In terms of indirect overseas offering and listing, the Measures set out the conditions that, if met on a substance-over-form basis, constitute indirect overseas securities offering and listing activities by domestic companies. After such direct and indirect offering and listing activities, these domestic companies are also required to comply with reporting requirements when certain material events occur, such as change of control. Separately, overseas securities companies acting as sponsors or lead underwriters must file with CSRC and submit annual reports on their business activities, pursuant to the Measures.
Regarding how the new filing-based regime would apply to the domestic companies with a variable interest entity ("VIE") structure, CSRC responded that it would seek the views of the relevant authorities and these companies would be allowed to file if their VIE structures comply with applicable PRC laws and regulations.
The promulgation of the Measures indicates that the regulatory system for overseas offerings and listings by domestic companies has officially stepped into a new era of a comprehensive filing-based system and closed many previous regulatory gaps. Henceforth, in many cases of domestic companies seeking for a listing on the Singapore Exchange ("SGX") – for example, indirect offering and listing on SGX of the shares of entities incorporated outside of the PRC and adopting a "red-chip" structure – filing procedures will have to be carried out with CSRC. For a detailed analysis on the Measures, please click here to read our Legal Update.
