Banks Push Back Against China’s Plan to Curb Foreign IPOs
(26 January 2022 – Global) Global banks are raising concerns to Chinese authorities about a plan to tighten rules on overseas stock listings, saying the draft rules are ambiguous and will expand Beijing's regulatory reach outside the nation's borders.
The proposals will also drive up costs and stymie dealmaking, the top lobby group for financial firms in Hong Kong said in a letter to the China Securities Regulatory Commission (CSRC).
China unveiled its plan for sweeping new regulations for overseas share sales in December last year. And the rules are open for public feedback until January 23. Once finalised, the rules will, for the first time, establish a unified supervision system for all overseas listings, regardless of the location of the initial public offerings (IPOs) and the ownership structure of the company, and provide a clear filing, vetting and approval process.
The push is part of a broader clampdown on big technology firms that has included massive antitrust fines and the halt of the US$35 billion initial public offering by billionaire Jack Ma's Ant Group Co.
Pushing back against China is fraught for Wall Street banks and their European rivals, all of whom are seeking to build major franchises in investment banking and asset management in the world's second largest economy.
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