New CDR draft rules to woo red chips stocks
Governance involving issuance pricing, purchasing, corporate screening and investor protection to be introduced soon
China’s securities regulator has issued draft rules on the incoming China Depositary Receipts for public comment, while insiders expect the final CDR plan to land as soon as the second half of this year, China Securities Journal reported.
Detailed rules, including CDR issuance pricing, purchase rules, corporate screening mechanisms and investor protection are being studied and expected to be introduced over the next two or three months.
Wei Tao, the research head from Pacific Securities, said CDR has created a shortcut for unicorn companies to return to the Chinese stock market.
It will also provide strategic capital support for China’s economic upgrading, and help to nurture a group of emerging “new economy” firms, Wei said.
The CDR program will allow domestic investors access to tech giants such as Alibaba and Baidu, which currently list in the United States. It also shows the resolution of regulators to bring back red chips stocks.