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”, 关于上海证券交易所与伦敦证券交易所互联互通存托凭证业务的监管规定(试行)) 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”, 境内外证券交易所互联互通存托凭证业务监管规定), 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
