labels: economy - general, markets - general
China sets conditions for foreign stock exchanges to set up representative officesnews
21 May 2007

Mumbai: China plans to allow foreign stock exchanges establish representative offices in the country provided they satisfy and adhere to certain conditions.

To be eligible, the stock exchanges should be in operation for over 20 years and the home countries of the exchanges should have signed memorandum of understanding on supervision cooperation with the China Securities Regulatory Commission (CSRC).

The offices are also required to report to the CSRC their large-scale promotion plans targeted at local businesses and can go ahead only if they get no rejection from the securities regulator 10 days after the reporting

The rules also ordered the offices to submit written reports to the CSRC 10 days after they give severe penalties to the companies listed on their stock exchanges.

No less than half of the staff at the office should be Chinese. The rules also apply to the stock exchanges in Hong Kong, Macao and Taiwan.

The representative offices can only do non-operating activities, including liaison, promotion and research, the rules stated. Violators will face warning, confiscation of all illegal earnings, or even closure.

The Chinese authorities are, meanwhile, working on the financial requirements, rules for which are expected to come into effect on July 1.

Analysts say the move is expected to facilitate the listing of more Chinese companies abroad.

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China sets conditions for foreign stock exchanges to set up representative offices