China's top securities watchdog unveiled a plan to implement the "full circulation" of shares of enterprises incorporated on the Chinese mainland and listed by the Hong Kong Exchanges and Clearing Limited (HKEX), also known as H-shares.
Qualified companies listed or planning initial public offerings on the H-shares market can apply for "full circulation" of their shares in accordance with the law, the China Securities Regulatory Commission (CSRC) said in a statement on Friday.
Full circulation means that the unlisted domestic shares of Chinese mainland companies can now be converted into H-shares for listing and circulation on the HKEX.
Domestic-funded shares held by domestic shareholders before overseas listing, domestic-funded shares issued on the Chinese mainland after overseas listing and unlisted shares in circulation held by foreign shareholders are all applicable under the new system.
A CSRC spokesperson said the "full circulation" of H-shares will have no direct impact on the operation of the A-shares, which are Chinese mainland shares listed on either the Shanghai or Shenzhen stock exchanges. The reform only involves single H-share companies listed on the Hong Kong market. All relevant unlisted domestic shares will be listed on the HKEX after being converted into H-shares.
Related guidance and application materials are available on the CSRC website, and all applications are subject to review and approval, said the CSRC.
The securities regulator also said it successfully completed a "full circulation" trial involving three companies last year with stable operation in both mainland and Hong Kong markets.
