Chinese regulators have reportedly expanded scrutiny of offshore listings that use variable interest entities beyond foreign countries to Hong Kong.
The Chinese Securities and Regulatory Commission (CSRC) is setting up a team to focus on Chinese firms seeking offshore listings via variable interest entities (VIE), according to a «Reuters» report citing unnamed sources.
Under the draft rules, Hong Kong-bound listings via VIEs will not be excluded from the process to seek approval.
No timeline has been set to roll out the new guidelines, the report added.
Tightened Fundraising
The latest move by Chinese regulators marks yet another example of tightening against Chinese fundraising outside of the mainland.
The Securities and Exchange Commission has also underlined VIEs as a cause for concern, with chairman Gary Gensler calling staff last month to take a pause on such structures seeking a listing in the U.S. over concerns about investor risk.
In 2021, funds raised from IPOs in Hong Kong reached $35.3 billion with Chinese companies accounting for 96.3 percent, according to Refinitiv data.
