China seeks more communication with US on foreign IPOs, companies and markets News & Top Stories

BEIJING (BLOOMBERG) — China’s securities regulator called for talks with its U.S. counterpart after the U.S. Securities and Exchange Commission (SEC) halted initial public offerings (IPOs) of Chinese companies amid a sale of shares worth nearly $1 trillion (S). $1.35 trillion) – released last week.

The China Securities Regulatory Commission (CSRC) is seeking to step up communications with the SEC to find an appropriate solution, it said in a statement on Sunday (Aug. 1) after the U.S. regulator said it would suspend all Chinese IPOs. until companies provide their risk statements. The Chinese watchdog called for mutual respect and cooperation in this area.

In response to Beijing’s crackdown on the private sector, SEC Chairman Gary Gensler asked staff to request additional information from Chinese companies before signing their registration statements to sell shares. China had previously proposed new rules requiring virtually all companies wishing to list abroad to undergo a cybersecurity assessment, a move that would massively increase oversight of its private companies.

Shares in the mainland and Hong Kong fell further Monday. The Shanghai Composite Index fell 0.5 percent while the Hang Seng Index fell 0.2 percent as of 10 a.m. Hong Kong time. Tencent Holdings and Meituan both lost more than 3 percent.

The crackdown on foreign listings comes after Didi Global advanced to the list in the US despite reservations from Beijing over the ride-hailing giant’s data security, Bloomberg News previously reported. Days after Didi’s debut, Chinese regulators announced an investigation into the company and removed the apps from Chinese mobile stores, triggering a sell-off of the tech giant’s shares. The losses to US investors have led to calls for the SEC to increase oversight of Chinese IPOs.

China has always taken an open-minded approach to listing locations, the CSRC said, adding that current oversight of certain industries is aimed at coordinating development and security. The securities watchdog will communicate closely with relevant departments to further improve policy transparency and predictability.

The statement echoed the comments made by CSRC Vice Chairman Fang Xinghai during a hastily arranged meeting with major international banks, including Goldman Sachs Group and UBS Group, on Wednesday as the regulator sought to allay market fears over Beijing’s crackdown.

It also adds to signs that Chinese authorities are uncomfortable with a sell-off that has sent the country’s major stock indices to the brink of a bear market. State media have published a series of articles suggesting the defeat has been exaggerated, with some analysts speculating that government funds have begun to intervene to support the market.

The state-run Xinhua News Agency said in a commentary over the weekend that China needs to properly handle the relationship between opening up and ensuring security in overseeing Chinese companies abroad, and that improving oversight will help necessary step is to help prevent and resolve related risks.

In its statement on Sunday, the CSRC also reiterated a pledge to open up the country’s financial sector and said it views the outlook for China’s capital markets as predictable, sustainable and healthy.