Regulator streamlines M&A process
July 14, 2014 Category Mergers & Acquisitions, Weekly
The China Securities Regulatory Commission (CSRC) will simplify the review process for major asset restructuring programs and take-overs of listed companies. Listed companies will no longer need CSRC approval for major asset restructuring programs, except in the case of backdoor listings. Such listings involve acquisitions of companies that already trade on stock exchanges by enterprises that don’t qualify for listings on their own. If a listed company plans to acquire assets by using its own shares, it will still need CSRC approval. The regulator also said that listed companies no longer need to provide profit forecasts when they acquire assets. The requirements for backdoor listings are the same as those for initial public offerings, and no listings by purchasing shell companies will be allowed on the ChiNext board, China’s Nasdaq-style market. Separately, the CSRC announced that it will no longer review take-over bids of listed companies, a move that it said will lower the acquisition cost for bidders. The CSRC also announced rules establishing a shelf registration system for public mutual fund issues. Effective August 8, fund firms need only register with the regulator to issue new products. The CSRC said it will complete all registration processes for products within 20 days after the required documents are submitted, the China Daily reports.
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