To facilitate cross-border investment and financing, promote the global allocation of production resources, and advance the institutional opening-up of the capital markets, the CSRC now proposes revision to the Provisions on the Supervision and Administration of Depository Receipts under the Stock Connect between Shanghai stock exchange and London stock exchange (for trial implementation) (CSRC Announcement [2018] No.30, hereinafter referred to as the “Original Provisions”), whose name would be changed to the Provisions on the Supervision and Administration of Depository Receipts under the Stock Connect Scheme between Domestic and Overseas Stock Exchanges (hereinafter referred to as the “Revised Provisions”). The Revised Provisions is open for public comments as of today.

Since the Original Provisions and relevant supporting rules of the Shanghai-London Stock Connect (hereinafter referred to as the “Connect”) were rolled out in 2018, four listed companies on the Shanghai Stock Exchange have offered global depository receipts (GDRs) and listed on the London Stock Exchange. The Connect has played a positive role in broadening channels for two-way cross-border financing and supporting the real economy. However, the current programme cannot accommodate listed companies on Shenzhen Stock Exchange and overseas issuers cannot raise capital through CDR offerings.

Market entities have put forward recommendations for optimizing and improving the Connect, and relevant stakeholders in Switzerland and Germany have expressed consistent interest to establish a similar stock connect programme with the Chinese capital markets. To respond to market demand and deepen the mutually beneficial cooperation between Chinese and European capital markets, the CSRC proposes the following revision to the Original Provisions.

(1) To expand the programme to cover eligible listed companies on Shenzhen Stock Exchange on the domestic side, and eligible listed companies in Switzerland and Germany on the overseas side;

(2) To allow overseas issuers to raise capital in the domestic market through CDR offerings and adopt a market-driven book-building mechanism; and

(3) To optimize ongoing supervision by making improved and more flexible supervisory arrangements for information disclosure, including annual reports and the disclosure on equity change.

We welcome public comments on the Revised Provisions. The CSRC will make further amendments and improvements, as appropriate, based on the comments received, and issue the finalized Revised Provisions as early as possible after fulfilling statutory procedures.

Notice on Public Consultation for Revision to the Provisions on the Supervision and Administration of Depository Receipts under the Stock Connect between Shanghai Stock Exchange and London Stock Exchange (for trial implementation)