Red-chip Listing and the Impact of the New Acquisition Regulations on It
Location: Long & Field
Related Information:
In the Regulations Regarding the Acquisition of Domestic Enterprises by Foreign Investors jointly issued by the MOFCOM, SASAC, SAT, SAIC, CSRC and SAFE, which is effective as of September 8, 2006, there is a section regarding the regulations on SPVs. The new acquisition regulations have evoked great repercussion in the society, and it is believed that the provisions regarding SPVs will increase the costs and uncertainty of red-chip listings of SPVs, which will result in the shrinking of red-chip listings. While after careful analysis of the terms and provisions, up to now, it is still uncertain what impact the new acquisition regulations will have on red-chip listings, as the relevant government authorities, especially the China Securities Regulatory Commission (CSRC), has great power of discretion. As a result, it is still too early to make the conclusion that red-chip listings will be hard to carry out.
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