The Coordinated Efforts of Regulating Overseas Listed Chinese Companies: A historical perspective and recent developments

Prestigious financial centres have attracted a number of Chinese companies which are seeking liquidity and at the same time international exposure (e.g. the recording breaking IPO of Alibaba in the US). This article seeks to explore how the regulatory cooperation of securities commissions can be a solution to the concerns arising from the regulation of these companies. One notable example is, the regulators in Hong Kong and China have indeed worked very closely together to devise a comprehensive regulatory framework for the Chinese companies listed on the Hong Kong Stock Exchange. However, with more and more Chinese companies listed on other prestigious exchanges, concerns are not only restricted to the Hong Kong market now, but also for the exchanges which are keen to attract Chinese issuers. The recent Securities and Exchange Commission action to compel five leading accounting firms to produce audit paperwork in relation to some Chinese companies, together with the exodus of Chinese companies from AIM of the London Stock Exchange, have generated much attention. This article will examine various bases of regulatory cooperation, together with some actual examples of cross-border enforcement action so as to underline the successes and challenges of regulating overseas listed Chinese companies.