Expanding the Shanghai-London Stock Connect scheme helps facilitate cross-border investment and promotes the opening-up of China’s capital markets, the China Securities Regulatory Commission (CSRC) said in a statement.
Under the current scheme, companies traded in Shanghai and London can list on each other’s bourses by selling so-called depository receipts. Chinese companies can raise fresh capital, but US-listed companies cannot, and are only allowed to issue Chinese Depository Receipts (CDRs) backed by existing shares.
On Friday, CSRC published revised rules for consultation, allowing offshore companies to raise fresh capital under the scheme, which will expand to include Germany and Switzerland.
In addition, qualified Shenzhen-listed companies can also participate in the expanded program.
So far, four Chinese companies are listed on the London stock exchange under the scheme, but no UK-listed firms have sold CDRs in Shanghai.