China’s new IPO rules to raise compliance challenges for overseas underwriters

An advertising board (L) showing a Chinese stone lion is pictured near an entrance to the headquarters (R) of China Securities Regulatory Commission (CSRC), in Beijing, China, in this September 7, 2015 file photo. REUTERS/Jason Lee/Files

Foreign financial intermediaries that manage overseas share sales of Chinese mainland companies could face tougher compliance challenges under a proposed new regulatory framework that will increase registration and paperwork requirements.

Draft rules unveiled by the China Securities Regulatory Commission (CSRC) on Dec. 24 will require the firms to file with the securities regulator within 10 working days “after the first engagement of such business.” Such firms include investment banks that sponsor or act as lead underwriters for a domestic company’s overseas securities offering and listing.

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