China’s VIE problem is resolving itself

03-Dec-2021 Intellasia | Reuters | 5:02 AM Print This Post

Beijing may try to tighten data oversight by banning companies from listing overseas using variable interest entities. US regulators are already pushing back on the structures and companies rethinking IPO venues. Another heavy-handed crackdown risks being unnecessarily clumsy.

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China is planning to ban companies from going public on foreign stock exchanges using offshore structures known as variable interest entities, Bloomberg reported on December 1, citing unnamed sources. The country’s securities regulator said a media report that the country will ban VIEs from listing overseas is “not factual”.

Companies that use VIEs would still be allowed to pursue initial public offerings in Hong Kong, according to the news report, but would be subject to regulatory approval. Companies already listed in the United States and Hong Kong will need to “make adjustments”, it added, without providing any more specifics.


Category: China

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