An animation program about the Chinese Lunar New Year traditions is seen on Nasdaq's outdoor display in Times Square, New York, February 11, 2021. Photo:Xinhua

China's top securities regulator released a revised supporting rule for firms seeking overseas listings on Friday, explaining filing management rules and pointing out their confidentiality responsibility. It comes amid accelerated efforts to help domestic firms float overseas in a more regulated way.

The adjustment aims to provide clearer guidelines for relevant entities to maintain confidentiality in overseas listing activities, as well as improving cross-border regulatory cooperation, the China Securities Regulatory Commission (CSRC) said on Friday.

The revised rule asks domestic enterprises to adhere to relevant laws and regulations, including those related to confidentiality, when providing and disclosing documents to securities companies, accounting firms, and other securities service agencies and regulatory agencies, during the process of overseas issuance and listing.

Furthermore, when domestic enterprises are required to provide documents and materials to relevant securities companies and securities service agencies, they must provide written explanations regarding the specific circumstances of any confidential or sensitive information provided. This ensures that all parties involved understand the importance of protecting such information and can take appropriate measures to maintain confidentiality, the CSRC said.

The CSRC will continue to promote the high-level institutional opening of the capital market, actively expand the beneficial results of the existing cross-border regulatory cooperation mechanism, create a good regulatory environment for overseas listing, and support companies to list overseas in accordance with laws and regulations, the regulator said.

The rule is a follow-up one after the CSRC on February 18 issued a 35-point rule for Chinese companies seeking a listing overseas, which stressed an improvement in the supervision mechanism and requested that domestic companies seeking overseas direct or indirect listings fulfill their due filing and reporting obligations.

Illegal actions such as failing to fulfill filing procedures and falsifying filing materials will incur high legal costs, according to the rules.

The latest moves by the Chinese securities regulator send a very positive message as part of China's commitment to opening-up and connecting with the world, experts said.

They cautioned that the legal framework and detailed rules are also necessary in terms of safeguarding China's national data security, considering that the practices of certain platforms in the collection and use of personal information may constitute a violation of laws, and overseas listings without approval could lead to sensitive personal data being leaked abroad.

Global Times