China Tightens Grip on Overseas Listing Funds

China has introduced new rules mandating the repatriation of funds raised from overseas listings to tighten oversight on cross-border financing. The regulations, effective April 1, 2026, require approvals for holding funds overseas for investments or loans. These measures aim to enhance stability and manage financial risks.

China is set to enforce stricter regulations on funds raised by domestic firms through overseas listings. Under the new guidelines, effective April 1, 2026, companies must repatriate collected funds unless special approval is obtained for foreign investments or loans.

The newly issued policies, jointly released by China's central bank and foreign exchange regulator, emphasize that dedicated accounts will be required for settling cross-border transactions. Shareholder transactions like buying or selling overseas-listed shares should also return funds to China in principle.

Further reforms involve the H-share 'full circulation' policy, mandating that fund transfers go through ChinaClear's accounts. Meanwhile, registration procedures linked to overseas listings have been simplified, with a focus on improving cross-border investment management.

(With inputs from agencies.)