Provisions on the Supervision and Administration of Depository Receipts under the Stock Connect Scheme between Domestic and Overseas Stock Exchange Are Promulgated
ISSUING AUTHORITIES:
China Securities Regulatory Commission
DATE OF ISSUANCE:
February 11, 2022
On February 11, 2022, the China Securities Regulatory Commission (CSRC) revised the Provisions on the Supervision and Administration of Depository Receipts under the Stock Connect between Shanghai Stock Exchange and London Stock Exchange (for trial implementation) (the“original Provisions”) and changed its name into the Provisions on the Supervision and Administration of Depository Receipts under the Stock Connect Scheme between Domestic and Overseas Stock Exchange (the“revised Provisions”). The revised Provisions entered into force as of the date of promulgation.
The major revisions are:
(1) In contrast to the stock connect scheme between Shanghai Stock Exchange and London Stock Exchange under the original Provisions, the programme has now been expanded to cover eligible listed companies on the Shenzhen Stock Exchange on the domestic side, and eligible listed companies in Switzerland and Germany on the overseas side.
(2) Overseas issuers are now entitled to raise capital in the domestic market through CDR offerings and may adopt a market-driven book-building mechanism under the main board issuance and underwriting rules with reference to the registration-based IPO segment.
(3) Ongoing supervision has been optimised with more flexible supervisory arrangement for information disclosure. An overseas issuer that adopts equivalent accounting standards does not need to make additional disclosure of the differences between the accounting standards it adopts and the Chinese Accounting Standards for Business Enterprises; nor does it need to disclose the difference adjustment information according to the Chinese accounting standards. The aforesaid issuer may calculate financial indicators based on the financial data prepared according to equivalent accounting standards.
Following the revised Provisions, Shanghai Stock Exchange and Shenzhen Stock Exchange issued detailed supporting rules on March 25, 2022.
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