China’s securities regulator called for talks with its American counterpart after the US Securities and Exchange Commission halted the initial public offerings of Chinese companies.
The China Securities Regulatory Commission is seeking to step up communication with the SEC to find a suitable resolution, it said in a statement Sunday, Aug 1, after the US regulator said it would suspend any Chinese IPOs until companies improved their risk disclosures. The Chinese watchdog called for mutual respect and collaboration on the issue.
In response to Beijing’s clampdown on private industry, SEC Chair Gary Gensler asked staff to seek additional disclosures from Chinese firms before signing off on their registration statements to sell stock. China had earlier proposed new rules requiring virtually all companies wanting to list in a foreign country to undergo a cybersecurity review, a move that would vastly increase oversight over its private enterprises.
The crackdown on overseas listings comes after Didi Global Inc. pushed ahead to list in the US, despite reservations from Beijing over the ride-hailing giant’s data security, Bloomberg News previously reported. Days after Didi’s debut, Chinese regulators announced a probe into the firm and removed its apps from Chinese mobile stores, driving a sell-off in the tech giant’s shares. The losses for American investors have fueled calls that the SEC increase oversight of Chinese IPOs.
China has all along adopted an open-minded approach to listing locations, the CSRC said, adding that the current scrutiny over certain industries is aimed at coordinating development and safety. The securities watchdog will carry out close communication with relevant departments to further improve transparency and predictability of policies.
In its statement, the CSRC also reiterated a pledge to open up the country’s financial industry and said that it sees the prospects for Chinese capital markets as predictable, sustainable and healthy.
