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Kul Bhushan · · 1 min readReport: China to tighten rules for tech firms seeking to list on US exchange
“Regulators in Beijing are planning rule changes that would allow them to block a Chinese company from listing overseas even if the unit selling shares is incorporated outside China, closing a loophole long-used by the country’s technology giants,” Bloomberg reported, citing people familiar with the matter.
Details:
- The China Securities Regulatory Commission may revise rules for firms already listed abroad or eyeing a listing overseas.
- If amended, the rules could prohibit some Chinese firms from using the Variable Interest Entity model to circumvent restrictions on foreign investment.
Dive deeper:
- Chinese regulators have recently cracked down on tech companies listing overseas recently. Ride-hailing app Didi is already facing a ban on app stores in China over allegedly collecting users’ personal data illegally. The blow from the regulator wiped out US$14 billion from Didi’s market cap on Tuesday.
- Over the weekend, the Cyberspace Administration of China has also come down heavily against popular mobile apps operated by Full Truck Alliance and Kanzhun. The two companies are also listed on the US stock exchange.
Editing by Collin Furtado and Arpit Nayak
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