Publication
Two VIE-structured Companies completed CSRC Filings for their overseas listings
China | Publication | October 2023
On 17 February 2023, the China Securities Regulatory Commission (CSRC) released “Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies” along with relevant notes and five regulatory guidelines (collectively, the New Overseas Listing Rules), which came into effect on 31 March 2023. The New Overseas Listing Rules introduced a new filing regime for overseas public offerings and listings by China-based companies. Companies incorporated outside of China (e.g. in the Cayman Islands) by Chinese individuals, but with their main business operations in China, must undertake a filing with CSRC when they seek an IPO on any capital market outside of Mainland China (CSRC Filing).
This CSRC Filing requirement also applies to, if relevant thresholds are met, overseas-incorporated companies operating in Mainland China under a “variable interest entity” structure (VIE Structure), typically in business sectors that are subject to foreign ownership prohibitions or restrictions (VIE-structured Companies)1. At the time when the New Overseas Listing Rules were promulgated, there was speculation in the market as to whether these VIE-structured Companies would be able to complete a CSRC Filing for their overseas listings. CSRC’s recent practice has shed some light on this issue.
On 14 and 15 September 2023, CSRC released two filing acknowledgement notices on its official website indicating the completion of CSRC Filings by two VIE-structured Companies. These are the first two examples of such companies which have successfully completed CSRC Filings under the New Overseas Listing Rules.
We set out below a brief introduction to these two VIE-structured Companies based on publicly available information:
1. J&T Global Express Limited (极兔速递环球有限公司)
Company name | J&T Global Express Limited (J&T) |
Place of incorporation |
Cayman Islands |
Stock exchange to be listed | Hong Kong Stock Exchange |
Corporate structure summary2 |
|
Main business |
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Reasons for adopting VIE Structure |
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2. Cheche Technology Inc. (车车开曼公司)
Company name | Cheche Technology Inc. (CCT) |
Place of incorporation |
Cayman Islands |
Stock exchange to be listed | Nasdaq |
Corporate structure summary |
|
Main business |
|
Reasons for adopting VIE Structure |
|
Both the filing acknowledgement notices issued by CSRC to J&T and CCT include, amongst others, the following requirements:
- within 15 working days of a successful offshore public offering and listing, the applicant should report to CSRC through an online information filing system; and
- if the applicant fails to complete an offshore public offering within 12 months after the date of the CSRC’s filing acknowledgement notice, but intends to continue with the offshore IPO application, then an update filing should be made with CSRC.
The success of J&T and CCT in their CSRC Filings under the New Overseas Listing Rules conveys a positive message to the market. They demonstrate that CSRC Filings for overseas listings by VIE-structured Companies could be completed (subject of course to CSRC’s case-by-case review and discretions), even if the operating entity under this structure operates in a business sector in China which is prohibited or restricted from foreign ownership or investment.
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