China published the final rules of a trial program for securities that would allow companies such as Alibaba Group Holding Ltd (阿里巴巴) to list on domestic exchanges, a major step in the country’s push to bring some of the world’s biggest technology firms back home.
The China Securities Regulatory Commission released the details on its Web site late on Wednesday. The regulations are broadly in line with published draft proposals.
The Chinese State Council, or Cabinet, announced the China depositary receipts (CDRs) trial program in March.
Most of the country’s tech giants, such as Alibaba and Baidu Inc (百度), have gone public in New York or Hong Kong to better access international capital, leaving the local market reliant on state-run industries.
First mooted in February, CDRs are now available for trial in the world’s second-biggest market.
Stock exchanges in Shanghai and Shenzhen are to conduct broker tests for CDRs in the next two weeks, the state-run Shanghai Securities News said.
The publication cited unnamed sources saying that the first CDRs are expected to start trading as early as next month.
Since the idea of CDRs was floated during the tightly scripted “two sessions” meeting of political bodies in Beijing in March, Alibaba, JD.com Inc (京東), Tencent Holdings Ltd (騰訊), Xiaomi Corp (小米), and China’s two biggest search giants, Baidu and Sogou Inc (搜狗), have expressed a wish to list on exchanges in the country.
Gaming giant NetEase Inc (網易), the Craigslist-like classifieds service 58.com Inc (58同城網) and the world’s second-largest online travel agent Ctrip.com International Ltd (攜程) have also voiced an interest, while Sina Weibo Corp (微博) and Sunny Optical Technology Group Co (舜宇光學) are reportedly considering the move.
Companies that went public overseas and have a market value of more than 200 billion yuan (US$31.28 billion) can apply for CDRs, and corporate structures that are not permitted in China are allowed. Funds raised with the listings can be moved offshore, the commission said.
Wednesday’s rules added further requirements, including that companies must have generally accepted accounting standards and healthy inner control measures, and that directors and senior executives must have good reputations and no significant legal blemishes.
The commission would strictly control the number of companies and amounts raised in the trial, and said it “hopes” that the market would not engage in speculation, it said.
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