China will tighten rules on overseas IPOs, but won't ban them entirely

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China is planning to tighten restrictions for Chinese companies that want to list overseas, but the government won't ban them from trading abroad altogether.

A VIE involves creating an overseas holding company that allows investors to own a stake in a Chinese company that would otherwise be difficult because of restrictions in the mainland.

The draft rules do not mention VIEs. But a spokesperson for the regulator said in published remarks Friday that firms using that kind of structure would still be allowed to list overseas, so long as they comply with the government rules and register with the regulator. In the weeks after the IPO, Beijing proposed that companies with data on more than 1 million users seek approval before listing overseas.

 

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