What are the legal provisions for overseas listing of enterprises in China?

Since 1992, the upsurge of overseas listing of China enterprises has continued, but at the same time there have been some problems. In order to strengthen supervision, Article 238 of the Securities Law stipulates: "Domestic enterprises directly or indirectly issue securities abroad, or their securities are listed and traded abroad, and must be approved by the the State Council securities regulatory agency in accordance with the provisions of the State Council." Enterprises registered and engaged in business in China, regardless of whether they have foreign investment background or not, and what the proportion of foreign investment is, must obtain the approval of the China Securities Regulatory Commission if they want to directly or indirectly issue securities abroad or list and trade their securities abroad. The State Council and relevant departments have successively issued a series of laws and documents on the overseas listing of enterprises, and made clear provisions on the relevant policies for overseas stock issuance and listing. Among them, 1997 Notice of the State Council on Further Strengthening the Management of Overseas Stock Issuance and Listing is a programmatic document. The document stipulates: 1. Overseas registered and Chinese-funded listed companies (including Chinese-funded listed companies as the largest shareholder) are subject to the supervision of local securities regulatory authorities, but the domestic equity holders of Chinese-funded controlling shareholders shall report the relevant information to the China Securities Regulatory Commission for the record afterwards to strengthen the supervision and management of equity. Second, Chinese-funded unlisted companies and Chinese-funded listed companies registered overseas apply for overseas stock issuance and listing in accordance with local laws with their overseas assets and domestic assets invested in China for more than three years, but their domestic equity holders should obtain the consent of the provincial people's government or the relevant competent authorities in the State Council in advance according to their affiliation; If its domestic assets are less than 3 years, it may not apply for overseas stock issuance and listing. If there are special needs, it shall be reported to the China Securities Regulatory Commission for examination and approval, and then it shall be examined and approved by the the State Council Securities Commission. After listing, domestic equity holders shall report relevant information to the China Securities Regulatory Commission for the record. 3. If the assets of domestic enterprises are transferred to overseas Chinese-funded unlisted companies or overseas Chinese-funded listed companies through acquisition, share exchange, transfer or any other form, and the domestic assets are transferred to overseas Chinese-funded unlisted companies and then injected into overseas Chinese-funded listed companies for overseas listing, the domestic equity holders or Chinese-funded controlling shareholders of domestic enterprises shall obtain the consent of the provincial people's government or the relevant competent authorities in the State Council in advance according to their affiliation, and report to the China Securities Regulatory Commission for examination and approval, which will be examined and approved by the the State Council Securities Regulatory Commission according to the national industrial policy, the relevant provisions of the State Council and the annual total size. 4. Reaffirm the spirit stipulated in the Notice of the State Council on Suspending the Acquisition of Overseas Enterprises and Further Strengthening the Management of Overseas Investment (Guo Fa [1993] No.69), and prohibit domestic institutions and enterprises from going public by purchasing the controlling shares of overseas listed companies. This document is still valid at present. 1On February 22, 1998, the China Securities Regulatory Commission issued the Notice of the China Securities Regulatory Commission on Several Issues Concerning the Implementation of the State Council's Notice on Further Strengthening the Management of Overseas Stock Issuance and Listing (Jian Zheng [1998] No.5), stipulating that overseas Chinese-controlled listed companies that have been audited by the China Securities Regulatory Commission and approved by the the State Council Securities Regulatory Commission for listing or capital injection shall/kloc-. All regions and departments shall not issue letters of commitment or similar letters to domestic and foreign institutions on the overseas listing of relevant enterprises in the name of the government. Under special circumstances, the opinions of China Securities Regulatory Commission should be sought in advance. It is strictly forbidden for people outside China to use inside information to make illegal profits in overseas stock markets. Overseas Chinese-controlled listed companies shall abide by the relevant laws and regulations of the place of listing, standardize their operations, and prohibit insider trading by overseas Chinese personnel. All domestic asset management and business activities shall comply with relevant domestic laws and regulations. All regions and departments should take effective security measures to prevent the disclosure of insider information, and it is strictly forbidden for domestic decision-makers to disclose insider information to overseas third parties for insider trading; The relevant departments shall, in accordance with the relevant laws and regulations of the state, severely punish overseas personnel who disclose inside information and conduct insider trading. Where the shareholding structure of overseas Chinese-controlled listed companies has undergone major changes, which have an impact on the Chinese-controlled position, domestic equity holders shall report relevant information to the China Securities Regulatory Commission for the record according to the time requirements specified in Article 2 of this Notice afterwards.