China scrapped some approval procedures related to initial public offerings, part of government efforts to cut red tape and spur private-sector investment.
Chinese companies no longer need a go-ahead from the foreign-exchange regulator to bring back money raised in overseas share sales, according to a State Council statement posted on the central government website today and dated Oct. 23. The government will also cancel the certification process for sponsor representatives, a qualification for investment bankers overseeing domestic IPOs, the statement shows.
Making it easier for companies to send proceeds back home may encourage more overseas share sales, easing the backlog of applications for domestic listings. The China Securities Regulatory Commission has yet to process 603 companies’ applications, more than five times the number of completed deals this year, according to data from the regulator’s website.
“China is taking another step to simplify its administrative process,” Ronald Wan, chief China adviser at Asian Capital Holdings Ltd. in Hong Kong, said by phone. “In the past, it wasn’t easy for many companies to transfer capital raised in the Hong Kong market to the mainland.”
The securities regulator requires Chinese investment banks to have so-called baodai, or sponsor representatives, to conduct due diligence and sign off on IPOs. The backlog for domestic IPOs includes 262 companies applying to list in Shanghai and 341 aiming for the Shenzhen bourse, the CSRC data show.
China’s government will also no longer require approvals for wine consumption tax rebates and canceled qualification permits for land valuers from the Ministry of Land and Resources, the statement shows.
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