Category Archives: Capital Markets

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Hong Kong Stock Exchange Announced New Listing Regime for SPAC

On December 17, 2021, the Stock Exchange of Hong Kong Limited (the Exchange) announced new listing regime for special purpose acquisition companies (SPAC).  These new rules will take effect on January 1, 2022.  This regulatory update reflects the Exchange’s commitment to remain an attractive, competitive and diversified capital-raising market in the region.… Continue Reading

New Regulations on the Investment in the Interbank Bond Market by Foreign Institutional Investors

The State Administration of Foreign Exchange (“SAFE”) issued a Notice on Foreign Exchange Administration Issues concerning Investment in the Interbank Bond Market by Foreign Institutional Investors (the “Notice”) on May 27, 2016, which further clarifies the supervision and administration of the investment in the interbank bond market by foreign institutional investors.… Continue Reading

New Registration Requirements and Deadline for PRC Domestic PE Funds and Managers

Domestic Chinese private equity managers should take notice of new provisional regulations requiring registration of domestic Chinese private equity managers and filings with the Asset Management Association of China (“AMAC”).  Also, Chinese private equity managers should take notice of an impending deadline to register with AMAC.… Continue Reading

CSRC Became Sole Regulator of PE Industry

The long fight between China’s regulatory agencies for the private equity (PE) and venture capital (VC) industry has finally been concluded. By a notice on Division of Duties in Private Equity Fund Administration promulgated by the State Commission Office for Public Sector Reform (“SCOPSR”) on June 27, 2013 (“Notice”), the China Securities Regulatory Commission (“CSRC”) … Continue Reading

Renminbi Qualified Foreign Limited Partner: an incremental step toward RMB internationalization in the private equity industry

In a number of incremental steps, the PRC government has been easing restrictions on the cross-border movement of RMB. The latest step for the private equity industry is the Renminbi Qualified Foreign Limited Partner Program (“RQFLP”), which permits offshore-raised RMB to be invested in PRC companies by PRC private equity funds and managers.… Continue Reading

Asset-backed Note: A Brand New Financing Instrument for Non-Financial Enterprises in China

By Xizhen Wang  On August 3, 2012, the National Association of Financial Market Institutional Investors (the “NAFMII”) issued the Guidelines on Asset-backed Notes for Non-financial Enterprises on the Interbank Bond Market (“银行间债券市场非金融企业资产支持票据指引”, the “Guidelines”), which creates a new channel for non-financial enterprises to secure financing or finance their operations.… Continue Reading

Big Four to Localize in China

By Amin Amirkia Earlier this month, China’s Ministry of Finance, State Administration for Industry and Commerce, Ministry of Commerce, State Administration of Foreign Exchange, and China Securities Regulatory Commission issued the Notice on Issuing the Scheme on the Localized Restructuring of Sino-Foreign Cooperative Accounting Firms (“Notice”), requiring the Big Four to “localize” their operations in … Continue Reading

New IPO Guidelines

By Amin Amirkia The China Securities Regulatory Commission (“CSRC”), China’s securities regulator, recently unveiled new guidelines (“Guidelines”) for China’s initial public offering (“IPO”) system. The guidelines were issued pursuant to feedback that was gathered from the public earlier in April. The Guidelines present increased efforts by the CSRC to administer China’s securities market and to … Continue Reading

Regulatory Challenges for the “Big Four”

By Amin Amirkia The “Big Four”, which dominate the Chinese market, are facing regulatory changes that could mean that only accountants with Chinese qualifications can be partners in their China-based audit practices. At the time of China’s accession to the World Trade Organization in 2001, the Big Four successfully lobbied to have an exception to … Continue Reading

Going Private: U.S. Listed Chinese Companies

Many U.S. listed Chinese companies have their eye on going private, with a growing number of such transactions having recently closed. This is the combined result of the current weakness of the U.S. capital markets, significant losses in the value of many U.S. listed Chinese companies, and pessimistic market forecasts that have resulted in trading … Continue Reading

SEC Toughens Listing Requirements for Reverse Merger Companies

By Amin Amirkia On November 9, 2011 the U.S. Securities and Exchange Commission (“SEC”) approved additional listing requirements proposed by the New York Stock Exchange (“NYSE”), NYSE Amex (“Amex”) and the NASDAQ Stock Market (“NASDAQ”) for companies going public through reverse mergers. The additional requirements are a response to the highly publicized cases of reverse … Continue Reading

New Developments for Foreign Special Purpose Companies and Round-Trip Investment

The State Administration of Foreign Exchange of the People’s Republic of China (“SAFE”) is the principal gatekeeper for incoming and outgoing investment made in foreign currency. SAFE wields tremendous influence over capital inflows and outflows and, as such, the rules it promulgates can significantly affect inbound investments. Recently, SAFE issued Circular 19, the ‘Operating Rules … Continue Reading

The New Chinese Growth Enterprise Market Is Launched — Stock Transfer Duties On “State-Owned” VC Firms and PE Funds?

On March 31, 2009, the China Securities Regulatory Commission ("CSRC"), the nation’s securities watchdog, issued the Measures on Administration of Initial Public Offering and Listing on the Growth Enterprise Market (the "Measures"). The long-awaited Growth Enterprise Market (GEM) was finally launched when the Measures came into effect on May 1, 2009. GEM is a NASDAQ-style … Continue Reading

China Strengthens Supervision of State-Owned Asset Restructuring

In June 2009, the Chinese government promulgated a series of regulations strengthening supervision of asset restructuring regarding state-owned shareholders in listed companies. The regulations are: Notice on Regulating the Issues Concerning the Asset Restructuring between State-owned Shareholders and Listed Companies (the "Notice"); Interim Measures for the Administration of State-owned Shareholders’ Transfer of Their Shares of … Continue Reading

Shanghai Adopts Rules on Private Equity Investment

In August 2008, in order to attract the private equity ("PE") investment in Shanghai, four governmental divisions of the Shanghai Municipality jointly issued the Notice on Business Registration and Other Issues of Equity Investment Enterprises ("Notice"), which regulates the categories, investors, forms, capital, and taxation of equity investment enterprises.… Continue Reading

Shareholder’s Equity as Capital Contribution to Other Companies

In June 2007, the Administration for Industry and Commerce of Zhejiang Province announced Measures on Administration of the Registration of Equity Contribution to Other Companies, which provided for the first time for a shareholder to use his equity interest in one company as a capital contribution to another company.  Subsequently, the Administration for Industry and … Continue Reading

Four Major Changes Boost Reform of the Foreign Exchange System

On August 6, 2008, the Regulations of the People’s Republic of China on the Management of Foreign Exchanges (“the Regulation”) completed an in-depth amendment process making four major changes to the duties of the State Administration of Foreign Exchange (SAFE) and rules related to the State’s foreign exchange system. The main principle is to introduce balanced management of inflow … Continue Reading

The New Chinese Corporate Internal Control Rules

On June 28, 2008, the Basic Rules for Corporate Internal Control (“Rules”) were jointly issued by the Ministry of Finance, the National Audit Office, the China Securities Regulatory Commission, the China Banking Regulatory Commission and the China Insurance Regulatory Commission. The Rules will take full effect on July 1, 2009 and initially affect only listed … Continue Reading

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