Explainer-How could China’s Didi delist from New York Stock Exchange?

China’s ride-hailing giant Didi Global Inc’s announcement on Friday that it plans to pull out of the New York Stock Exchange and pursue an IPO in Hong Kong raises the question of how the move will happen.

The decision, just five months after the company’s debut on the NYSE, was a stunning sea change as it bows to Chinese regulators angered over the US IPO.

Reuters spoke with three regulatory lawyers not involved with Didi, who expressed their views on how the Chinese company might transfer its listing.

WILL DIDI LIST IN HONG KONG BEFORE WRITING IN NEW YORK?

Didi has not disclosed whether a listing in Hong Kong will precede a delisting in New York. If so, transferring the listing would be easy.

Didi said Friday that his American Depository Shares (ADRs) “may be converted into freely tradable shares of the company on another internationally recognized stock exchange at the option of ADS holders.” This would allow investors to exchange ADRs for Hong Kong-listed shares. They can sell earlier if they want to; Didi shares ended Friday at 22.1 percent as many investors chose to cash out.

Didi has not provided a timeline for the move.

CAN DIDI DELIST IN NEW YORK BEFORE LISTING IN HONG KONG?

Yes. In that scenario, investors would be given the option to hold onto their shares or sell them over the counter if they didn’t sell them before the delisting. If Didi wants to buy back shares from his shareholders, he usually has to pay a premium.

CAN DIDI EXCLUDE NEW YORK AT WILL?

There are some requirements of the US Securities and Exchange Commission (SEC) that must be met. Didi went public in New York less than six months ago and will have to wait a year for the delisting to be completed. It will have to continue filing information with the SEC even after it’s delisted from New York, as long as it has 300 U.S. shareholders.

(Reporting by Echo Wang in Albuquerque, New Mexico; editing by Sandra Maler)