HONG KONG: China's plan to tighten scrutiny over mainland companies' offshore share sales should help reduce the regulatory uncertainty that roiled financial markets this year and stalled offshore listings, according to bankers and analysts.
The rules remove uncertainty for investors who had feared that authorities would block offshore listings of VIE-structured companies to plug a regulatory loophole. "The issuance of the draft rules shows that major communication obstacles have been removed between different regulatory bodies," said Ming Jin, managing partner at Chinese boutique investment bank Cygnus Equity.Reaction to the new rules will be seen on Monday when the US stock market resumes trading after the Christmas holiday, which included Friday. Hong Kong stocks will resume trading on Tuesday.