How to Harness a Unicorn? Demystifying China’s Reform of Share Listing Rules and Chinese Depositary Receipts (CDRs)

International Company and Commercial Law Review (2019), Vol. 30(8), pp. 454-470

17 Pages Posted: 30 May 2019 Last revised: 16 Oct 2019

See all articles by Ningyao Ye

Ningyao Ye

China University of Political Science and Law - School of Juris Master

Lerong Lu

The Dickson Poon School of Law, King's College London

Date Written: May 7, 2019

Abstract

This article introduces and analyses China’s latest reform of securities laws to attract domestic unicorn companies (with a valuation over $1 billion) and tech giants to list or dual-list their shares on mainland China’s Shanghai and Shenzhen Stock Exchanges. In the past, most Chinese tech businesses tried to obtain a listing in either Hong Kong or New York to raise funds, owing to China’s onerous listing rules and various legal restrictions on critical issues such as the variable interest entity, dual-share structure and the issuers’ profitability. However, the recently introduced initial public offering (IPO) green channel and Chinese depositary receipts (CDRs) aim to entice Chinese businesses to list their shares at home. The Chinese smartphone-maker Xiaomi, as well as the British bank HSBC, are said to be the first group of global companies planning to issue CDRs and float their shares in mainland China.

Keywords: China, Financial Regulation, Stock Market, Financial Law, Securities Regulation, Initial Public Offering, IPO, Chinese Depositary Receipt, CDR, Shanghai Stock Exchange, Shenzhen Stock Exchange, Unicorn Company, Variable Interest Entity, Dual-Share Structure

Suggested Citation

Ye, Ningyao and Lu, Lerong, How to Harness a Unicorn? Demystifying China’s Reform of Share Listing Rules and Chinese Depositary Receipts (CDRs) (May 7, 2019). International Company and Commercial Law Review (2019), Vol. 30(8), pp. 454-470, Available at SSRN: https://ssrn.com/abstract=3384138

Ningyao Ye

China University of Political Science and Law - School of Juris Master ( email )

Beijing
China

HOME PAGE: http://flssxy.cupl.edu.cn/en/info/1009/1216.htm

Lerong Lu (Contact Author)

The Dickson Poon School of Law, King's College London ( email )

Strand
London, WC2R 2LS
United Kingdom

HOME PAGE: http://www.kcl.ac.uk/people/lerong-lu

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