An investor at a brokerage in Fuyang, Anhui province, on Wednesday. An official from the China Securities Regulatory Commission said the Securities Investment Fund Law is to be modified to prepare for the listing of foreign companies on the A-share market. [Photo/China Daily]

'Time is right' to set rules for overseas firms that want to list in the mainland

A senior official of the China Securities Regulatory Commission, or CSRC, has submitted a proposal to the first session of the 12th National People's Congress to create standards for overseas enterprises that want to list on the mainland stock market.

Ouyang Zehua, head of the Securities Listing Department of the CSRC, said on Wednesday that a second modification of the Securities Investment Fund Law is expected to start this year to prepare for the listing of foreign companies in the A-share market.

"After discussions with more than 60 deputies of the 12th NPC, we reached a consensus that the law should cover creating a platform for outstanding foreign companies to issue stocks in the mainland," Ouyang said.

"But how to express the new policy stance in the law has not yet been decided. It may take another two to three years to complete the modification," he added.

The expected platform for listing foreign enterprises is the international board, which has attracted the market's attention for more than three years. But the latest word from the CSRC was that "there is still no timetable to launch the board".

"As the mainland stock market is growing at a fast pace, now is the time to consider how to welcome foreign enterprises in the A-share market and broaden the investment channels for domestic investors," Ouyang said.

The long delay in the international board's launch may be due to the sluggish mainland stock market, the performance of which also influences the approval of local initial public offerings.

The benchmark Shanghai Composite Index retreated for the fifth consecutive day at the close on Wednesday to end at 2,263.97 points, or a 0.99 percent decline from the previous day and a two-month low.

Also, the South China Morning Post reported on Wednesday that CSRC Chairman Guo Shuqing is likely to become the governor of Shandong province after his 18-month tenure as head of the securities regulatory institution.

The news department of the CSRC refused to comment on the report.

There has been speculation that changes in the CSRC's top leadership may influence reforms in the stock market.

The 57-year-old chairman has initiated a large package of market-oriented reforms, including curbing the irrationally high prices of new shares and protecting investors' interests.

The market has not seen a new IPO in about four months. As of March 7, some 859 enterprises were still on the waiting list to raise funds from the market.

According to the CSRC, 30 companies that had applied for an IPO had quit the procedure by the end of last week.

Ouyang said that any new modification of the law should include policies to encourage more Chinese companies to issue shares in overseas markets.

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