CSRC supports more U.S. listings

China has given the green light to a digital industrial product services platform's listing in the United States, indicating that Beijing is making solid efforts to keep the channel of overseas listings open, a source close to the country's top securities regulator said.

After coordination with relevant industry regulators, the China Securities Regulatory Commission recently issued a response showing that it is not opposed to ZKH and other companies seeking listings in the U.S., the source said.

A new set of rules concerning overseas listings is expected to facilitate more offshore IPOs in a rule-based manner, as the rules have undergone public opinion analysis and will come into force as soon as possible, according to the source.

China released a set of draft rules in December that require local companies seeking overseas floats to register with the domestic securities regulator in a bid to help local firms enter global capital markets in a well-regulated manner.

Ren Zeyu, an associate professor at the China University of Political Science and Law in Beijing, said the latest green light for offshore IPOs indicates that China is making substantive progress in exploring the mechanism of overseas listing registration and supervision, which involves both the CSRC and relevant industry regulators.

"This will help pave the way for the new rules for offshore listings taking effect and anchor market expectations over related supervision. It also releases a signal that China is actively seeking an optimized solution to cross-border listing supervision cooperation," Ren said.

His remarks came amid China's stepped-up efforts to mitigate regulatory uncertainties facing Chinese issuers selling shares overseas, especially in the U.S..

The State Council's financial stability and development committee said at a meeting earlier this month that China continues to support various companies to seek listings overseas and the country is working with U.S. regulators on specific cooperation plans in regard to Chinese listings there.

The source also said regulators from both sides are working hard to find solutions to auditing issues surrounding U.S.-listed Chinese companies so as to achieve effective and sustainable cooperation as soon as possible.

Both sides show active willingness and proactive attitudes toward resolving the issue and continuously engage in efficient, candid and professional consultations, the source quoted the CSRC as saying during a videoconference on Sunday.

The CSRC organized the video meeting to solicit market opinions about recent developments surrounding overseas listings.

While choosing not to disclose details about the negotiations with U.S. regulators, the CSRC called on market participants to rely on information the regulators have publicly delivered, citing that some media outlets have released misleading information that disturbed market expectations, the source said.

The U.S. Securities and Exchange Commission added microblogging platform Weibo to a watchlist last week as the sixth Chinese company facing possible delisting in 2024.

The Hang Seng Tech Index in Hong Kong, which tracks internet giants like Alibaba that also have U.S. floats, jumped by 2.62 percent to close at 4494.01 points on Monday, after shedding 4.98 percent on Friday.

Ren said he looks forward to both sides strengthening cooperation in addition to maintaining close communication, citing the need to strike a balance between U.S. regulators' emphasis on information disclosure quality and the Chinese counterpart's need to protect data security.

"Fortunately, both sides are committed to investor protection and cracking down on false statements. Hopefully, they can achieve more progress on this common ground in audit supervision cooperation," Ren said.