Suggestions on improving the management of overseas listing of Chinese-funded enterprises

Further improve the information collection of overseas listed companies

At present, the foreign exchange bureau still has very limited information on the indirect overseas listing of Chinese-funded enterprises, and cannot grasp the information of overseas listed enterprises from the whole picture. It is recommended to further improve it from the following aspects.

The first is to improve the registration information requirements for special purpose companies. Effective penetration of information in the registration of special purpose companies, such as the establishment of special purpose companies for the purpose of overseas listing, the registration of specific issuance, shareholding, capital utilization and other information with reference to the existing management requirements for overseas listing of domestic enterprises.

The second is to establish an effective association between FDI and ODI information. In the FDI registration process, for overseas listed companies whose return investment and whose overseas direct or indirect shareholders include domestic entities control, additional registration of the relevant ODI registration business number is required, and the registration information of relevant special purpose companies can be directly inquired through the system.

The third is to monitor the flow of funds raised from overseas listings. For overseas entities that inject domestic assets and interests to achieve overseas listing, they are required to disclose the scale and use plan of the raised funds, and indicate the source of the investment funds as the overseas entities raised and listed funds in the round-trip investment link.

Strengthen cross-departmental regulatory cooperation and communication

There are many departments involved in the overseas listing management of Chinese-funded enterprises, and the management ideas and priorities of each department are different. It is recommended to strengthen cross-departmental supervision cooperation, and clarify and unify some management requirements to be regulated.

First, establish a regulatory information sharing mechanism. The foreign exchange bureau, the China Securities Regulatory Commission, and the Ministry of Affairs can share information on the situation of overseas listed Chinese-funded enterprises that they have mastered, so that each department can grasp the situation of overseas listing of Chinese-funded enterprises from a comprehensive perspective.

The second is to uniformly identify the legitimacy of the VIE structure. In view of the fact that my country will continue to maintain restrictions on foreign investment access in some fields for a long time, and private enterprises in these fields have a strong demand for overseas listing and financing, from the perspective of supporting the development of the real economy, various departments can recognize the VIE agreement as a kind of agreement between enterprises. Associate control relationships and give them legal status in practice.

The third is to appropriately lower the threshold for approval of overseas listings. At present, in order to avoid supervision and improve the efficiency of listing, many domestic companies have adopted the "small red chip" model to list overseas, and many companies' overseas listing behavior is actually outside the regulatory system. It is recommended to "open the front door and block the back door", and clearly include the behavior of individuals listing overseas through the establishment of special purpose companies into the regulatory vision, while lowering the threshold for overseas listing, and changing more pre-approval approvals to post-event registration and filing.

Actively do a good job in stock market policy reserve research

In recent years, the pace of innovation in the overseas securities market has been rapid, and there have been some new changes in the mainstream methods of overseas listing, which require domestic regulatory agencies to formulate and issue supporting policies. At the same time, due to the fact that overseas securities markets are still quite different from those of my country in terms of regulatory rules, financial systems, and political backgrounds, China concept stocks listed overseas have tended to return to domestic listings in recent years, which also requires domestic regulatory agencies to study and implement supporting policies.

The first is to open up the establishment of SPAC companies overseas by domestic entities on a pilot basis. The current establishment of a SPAC does not require domestic sponsors to remit a large amount of funds, and the overall risk is relatively small for the country, and a gradual pilot to open up this business may be considered. For the establishment of a SPAC initiated by an individual overseas, it may be considered to combine with the existing special purpose company and appropriately expand the scope of the individual special purpose company. The investment subject of the special purpose company for the purpose of establishing a SPAC may not be limited to domestic, and can be opened through the foreign exchange bureau. The purchase of foreign exchange in the form of an approval certificate is used for capital contribution of the company.

The second is to further improve the management of the return of overseas listed red chips to domestic listing. In response to the possibility that the United States may crack down on my country's listed Chinese stocks in the United States, actively do a good job in the research and formulation of response policies. On the one hand, accelerate the reform of the domestic stock issuance registration system, and further reduce the threshold for start-up companies to list in China. On the other hand, supporting and improving the policies related to the return of red chip stocks to domestic listing, further clarifying the standards for the return of red chip stocks to domestic listing, and detailing the relevant details of operations such as dividend distribution, reduction and repurchase after the listing of red chip stocks, and opening up channels for domestic issuance and listing of red chip stocks.