Beijing Local Financial Supervision and Administration Bureau is reportedly planning to attract US-listed Chinese firms to return by coming up with supportive policies and carrying out pilots in the “New Third Board” or other bourses, after the Nasdaq tightened listing rules for Chinese firms due to the US’ push for financial decoupling with China.
The bureau said it would comb through US-listed Chinese firms and support those qualified companies to return to the A-share or Hong Kong markets, while for those that do not yet qualify, a special platform assisting companies with IPOs would provide comprehensive services, local media The Beijing News reported Monday.
“While putting effort into anti-pandemic combat, Beijing will continue to promote development and boost excellent science and innovation companies to choose appropriate domestic or overseas capital markets to get listed according to their own development situation,” the report said.
The administration did not reply to a request for comment from the Global Times by press time Monday.
Dong Dengxin, director of the Finance and Securities Institute at the Wuhan University of Science and Technology, told the Global Times Monday that the Beijing regulator’s move is within expectations as the US government continues to promote China-US financial decoupling and raises the threshold for Chinese firms seeking to list in the US.
Nasdaq recently enhanced IPO criteria for companies operating in “restricted markets” – jurisdictions with laws that restrict access to information by regulators of US-listed companies, according to a document released by the US Securities and Exchange Commission in June.
US Secretary of State Mike Pompeo applauded the exchange’s actions, warning US investors against “fraudulent” accounting practices in China-based firms while suggesting the Nasdaq should be a model for all other exchanges across the world.
“Out of the ulterior motive of containing China’s economic and technological development, the US has in fact politicized capital markets by maneuvering the rules targeting Chinese companies,” Dong said, urging domestic companies to be prepared for possible forced delisting from US capital markets.
Tech firms Alibaba and JD’s secondary listings in Hong Kong and Ant Group’s planned listing in both the Hong Kong Stock Exchange (SEHK) and Shanghai Stock Exchange (SSE) STAR market are expected to prompt more domestic tech firms to follow suit and choose to get listed domestically.
“The innovative measures implemented by the SSE, the STAR market and the SEHK have opened the doors for global investors to access cutting edge technology companies from the most dynamic economies in the world, and for those companies to have greater access to the capital markets,” said Eric Jing, Executive Chairman of Ant Group.
(In association with Global Times)