On 30 March 2018, the China Securities Regulatory Commission (CSRC) released Several Opinions on Launching the Pilot Programme for Issuance of Shares or Depository Receipts by Innovative Companies in Domestic Market, clarifying the new paths for innovative companies seeking initial public offerings (IPOs) in mainland China, and the key principles to which they are subject.
On 4 May, the CSRC published the Measures for the Administration of Issuance and Trading of Depository Receipts (Draft for Comment), which, together with the pilot programme opinions, form the “new Chinese depositary receipts (CDR) policies”, to solicit comments from the public. The new CDR policies establish a unified regulatory framework for the issuance and trading of depository receipts.
New options of IPO paths for innovative companies. The pilot programme opinions make it clear that there are three options for an innovative company to go public in mainland China: a red chip company may go public by issuing depository receipts, or shares in the domestic market; and a Chinese innovative company may go public by issuing shares in the domestic market.
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Liu Tao is a partner at Commerce & Finance Law Offices in Shanghai. He can be contacted on +86 21 6019 3260 or by email at email@example.com
Huang Qingfeng is an associate at Commerce & Finance Law Offices in Shanghai. He can be contacted on +86 21 6019 2695 or by email at firstname.lastname@example.org