SGX and China Securities Regulatory Commission Establishing Direct Listing Framework
China’s growing economy offers investment opportunities for investors worldwide. SGX, as the Asian Gateway, can provide the platform for suitable companies that meet Singapore’s regulatory and governance standards to reach out to investors who want to invest in China’s growth.
Under the new framework, Chinese companies incorporated in China and that have obtained the approval of CSRC are able to seek a listing on SGX. The regulatory processes and due diligence conducted by the relevant regulatory organisations in both countries will provide greater assurance to the marketplace.
The framework will include the following requirements:
• Potential issuers to file their applications with the CSRC and SGX. CSRC will review these applications before granting administrative licensing approval for the issuer’s listing in Singapore. Subject to satisfactory review, SGX will then issue an eligibility-to-list.
• Applicants must comply with all relevant laws and regulations in China, as well as all requirements and regulatory standards of Singapore and SGX.
• The financial statements of the applicants must be audited by certified public accountants in accordance with the Singapore Standards on Auditing, International Standards on Auditing, or US’ Generally Accepted Auditing Standards.
Magnus Bocker, CEO of SGX, said: “The Direct Listings Framework will enable companies from China to more efficiently tap the capital markets in Singapore and reach out to our global investor base, offering the latter more choices and access to the growing Chinese economy.”
According to Dr Tong Dao Chi, Director-General of the Department of International Affairs of the CSRC: “The CSRC welcomes the establishment of a Direct Listings mechanism and associated arrangements, supporting Chinese domestic enterprises that have fulfilled the listings criterion set by the overseas markets, and in accordance with their respective development needs to choose to list overseas. The CSRC will strengthen cooperation with SGX on Chinese domestic enterprises direct listing in Singapore, providing Chinese domestic enterprises with better understanding of the requirements and more efficient procedure and platform to list on SGX.”