China Offers easier capital market access to the Covid-Hit Firms

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China Offers easier capital market access to the Covid-Hit Firms

Chinese companies impacted by the pandemic are to be offered an easier entrance to its capital markets as Beijing bids to improve its Covid-hit economy.

Chinese regulators as well encouraged brokerages and fund managers to channel more capital into virus-hit areas and sectors.

And the China Securities Regulatory Commission (CSRC) also promised more regulatory flexibility if businesses can’t sign documents or meet financiers in person because of pandemic-related restrictions.

China is grappling with the biggest Covid-19 outbreak in two years, with full or partial lockdowns in cities such as Shanghai hitting consumption and production and raising the prospect of economic recession.

The CSRC urged stock and futures exchanges, and other institutions to “make solid efforts to help companies wade through the pandemic.”

The CSRC said that profitability constraints will be lessened for virus-hit companies in the vetting of initial public offerings (IPOs), if the applicants’ operations are deemed sustainable.

Meanwhile, the application process for refinancing, bond sales and asset purchases will be accelerated for Covid-hit sectors.

CSRC Encourages Brokerages to Help

Regulators will also allow businesses to use electronic signatures when applying for securities issuance and increase the deadline for addressing regulatory enquiries.

The CSRC also encouraged brokerages to underwrite more share and bond sales for companies affected strongly by the virus, and steer clear of margin calls as much as possible.

For mutual fund houses, the CSRC urged them to actively use their own capital to purchase funds and channel more private capital into virus-fighting companies.

Regulators will also accelerate the approval of anti-virus fund products, according to the statement.

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