CSRC advances restructuring rules

The China Securities Regulatory Commission (CSRC) released two new guidelines pertaining to the acquisition and restructuring of listed companies Friday, a move which signals the commission's determination to support activity in this area.

According to official figures, there were 558 acquisition and restructuring cases in China's A-share market during the first half, involving a combined 215.4 billion yuan ($35.24 billion). Many companies pursue such deals, since they can diversify their business scope and add to their market value.

With its latest measures, the CSRC has relaxed the examination and approval process when it comes to acquisitions. At the same time, new barriers have been erected to prevent companies from going public through shell companies. On this latter front, the CSRC should lay out clear terms to define such shells. By doing so, it can close loopholes which certain companies might want to exploit.

An efficient acquisition and restructuring system can make China's listed companies stronger and better able to meet market needs.