The China Securities Regulatory Commission (CSRC) said that it is proposing amendments to the existing stock connect programme between the Shanghai and London stock exchanges.
These include expanding the programme to cover eligible listed companies on the Shenzhen Stock Exchange on the domestic side, and eligible listed companies in Switzerland and Germany on the overseas side.
The regulatory body said the revisions are made to respond to market demand and deepen the mutually beneficial cooperation between Chinese and European capital markets.
“Market entities have put forward recommendations for optimising 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,” said the CSRC in the announcement.
Other amendments proposed by the CSRC are to allow overseas issuers to raise capital in the domestic market through Chinese Depositary Receipt offerings, and to “optimise information disclosure”.
After the revisions, an overseas issuer no longer needs to make additional disclosure of the differences between its accounting standards and the Chinese accounting standards.
Yet, it will be required to disclose the main difference in its overseas annual report compared with the Chinese standards, and provide information on equity changes.
A consultation on the proposed revisions is taking place until 16 January, 2022.
Launched in 2019, the Shanghai-London Stock Connect allows eligible companies listed in each market to issue depository receipts on the other exchange, which represent ownership of their shares.
So far, four listed companies on the Shanghai Stock Exchange have offered and listed global depository receipts on the London Stock Exchange, according to the announcement.