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To: manalagi who wrote (1581)10/1/2011 6:24:00 AM
From: manalagi  Read Replies (1) of 2098
 
Proposed VIE Reforms: Future Overseas IPOs would Require Approval from Chinese Regulators Posted on September 28, 2011


(iChinaStock News) Proposed reforms to China’s VIE structure were disclosed by the Chinese press today. If accepted, firms would require Chinese regulatory approval for new overseas listings.

Earlier this month, the China Securities Regulatory Commission (CSRC) was rumored to have submitted a report with suggested VIE reforms to the Chinese State Council. A leak of the report was published by The Economic Observer in Chinese today.

The report describes Variable Interest Entities (VIEs) as a major threat to China’s national security, but does not suggest that China’s top leaders ban the structure.

iChinaStock has translated four key reforms proposed in CSRC’s report:

1) Chinese companies under the VIE structure must receive approval from by both the Ministry of Commerce (MOC) and CSRC to list overseas.
2) Old rules for old companies (those already listed overseas) and new rules for new companies (those not yet listed overseas). In other words, firms that are already listed overseas would be exempt.
3) Encourage Chinese Internet companies to list on the domestic market.
4) A few companies that have reasons and desires to list overseas, such as the internet companies that are temporarily unable to list domestically, should be able to list directly in foreign markets. Note: the meaning of this “direct listing” is still unclear.

Note that CSRC’s suggestions will not necessarily be accepted by China’s State Council. Shanghai Securities News, run by the official Xinhua News Agency, said on Wednesday that the report is only a research article. But investors should now have an outline of the new investment landscape.

By Wang Xing, iChinaStock.com

http://news.ichinastock.com/2011/09/proposed-vie-reforms-would-require-chinese-regulatory-approval-for-future-overseas-ipos/
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