The Provisions allows companies listed on the Shenzhen Stock Exchange (SZSE) or the Shanghai Stock Exchange (SSE) to issue global depository receipts (GDRs) and list them on stock exchanges in the UK, Switzerland, Germany, and other countries.
On 11 Feb. 2022, China Securities Regulatory Commission (CSRC) amended the “Provisions on the Supervision and Administration of Depository Receipts under the Stock Connect Scheme between Shanghai Stock Exchange and London Stock Exchange (for Trial Implementation)” (No. 30 [2018] of CSRC) (hereinafter “the Provisions for Trial”, 關于上海證券交易所與倫敦證券交易所互聯互通存托憑證業務的監管規定(試行)) 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 Exchanges” (hereinafter “the Provisions”, 境內外證券交易所互聯互通存托憑證業務監管規定), which came into effect immediately on the day of issuance.
Prior to the Provisions, China issued the Provisions for Trial in 2018, which established the Shanghai-London Stock Connect scheme, allowing the interconnection between the SSE and the London Stock Exchange (LSE). Qualified companies from either market could issue depositary receipts (DR) and list them on the other market.
Through the Shanghai-London Stock Connect scheme, several Chinese companies succeeded to issue GDRs on LSE including Huatai Securities Co., Ltd., China Pacific Insurance (Group) Co., Ltd., China Yangtze Power Co., Ltd, SDIC Power Holdings Co.
According to the Provisions in 2022, on the domestic front, qualified companies listed on the SZSE, in addition to the SSE, are also allowed to apply for the issuance of GDRs in overseas markets, which are further expanded from the UK to Switzerland and Germany, once recognized by the CSRC.
Cover Photo by Yiran Ding on Unsplash
Contributors: CJO Staff Contributors Team
