New restrictions on Chinese IPOs overseas may mean lower returns or inability to easily exit investments, prompting investors to hold off on Chinese start-ups.
and remove its app from app stores.
Among several measures, the China Securities Regulatory Commission announced new draft rules in December that laid out specific requirements for filing for a listing abroad, and said the commission would respond to such requests within 20 working days of receiving all materials. The commission Meanwhile, the U.S. Securities and Exchange Commission in December asked Chinese companies to disclose more details about their regulatory risks and ties to government backers. White House sanctions on certain Chinese companies likeForeign financial institutions involved with Chinese IPOs face rising "commercial risks" of the invested company "becoming sanctioned because of its reputation with the U.S.
"The new rules may impose long waiting periods for companies hoping to list abroad," the analysts said. "We expect this uncertainty to dampen investor sentiment, potentially depress valuations for Chinese IPOs in the US and make it more difficult for Chinese companies to raise funds overseas."