China's securities regulator has relaxed some restrictions on overseas share offerings of local financial institutions, in a move that paves the way for mainland securities firms to complete their international listings. Mainland-listed securities houses, including cf securities and huatai secukities, will be allowed to offer H shares in Hong Kong at a discount larger than 15%, according to two sources with direct knowledge of the matter. In the past, the China Securities Regulatory Commission's unwritten rules had limited to no more than 10% the discount that most mainland-listed companies could offer in Hong Kong. Only a handful of companies have been able to offer discounts of up to 15% with special approval from the CSRC, which has been intent on limiting speculation and arbitrage trading between the onshore and offshore markets. The recent strong run-up in the A-share market, however, has made the rule a major obstacle for Chinese securities houses looking to sell shares overseas.
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