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China Offers Easier Capital Market Access to Covid-Hit Firms

Beijing has urged stock and futures exchanges to ‘make solid efforts to help companies wade through the pandemic’

Shanghai business district
Western financial firms in China have been warned that new cybersecurity rules could pose a significant risk to their operations for a range of different reasons. They provided feedback to the CSRC on the new laws in recent days. Photo: Reuters.


Chinese firms impacted by the pandemic are to be offered easier access to its capital markets as Beijing bids to boost its Covid-hit economy.

Chinese regulators also urged brokerages and fund managers to channel more money into virus-hit areas and sectors.

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


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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 requirements will be lowered for virus-hit companies in the vetting of initial public offerings (IPOs), as long as the applicants’ operations are deemed sustainable.

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


CSRC Encourages Brokerages to Help

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

The CSRC also urged brokerages to underwrite more share and bond sales for companies affected by the virus, and avoid margin calls as much as possible. 

For mutual fund houses, the CSRC urged them to actively use their own money to buy 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. 


  • Reuters with additional editing by Sean O’Meara


Read more:

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Shanghai Factory, Retail, Property Sectors Pulverised by Lockdown


Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.


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