China: Recent Developments in the Regulation of Private Placements

03/12/2015

Unlike in the U.S., private placements of securities in China are regulated differently, depending on who is actually doing the private placement. Historically, private placements of securities in China are sorted into three main categories, and each category is regulated by different agencies with their own rules and regulations:

  1. Private placement of securities by publicly listed companies: Regulated by the China Securities Regulatory Commission ("CSRC").
  2. Private placement of securities by private equity funds and venture capital funds (the money raised is intended to be used for investing in other securities): Historically regulated by a hodgepodge of regulators, including the National Development and Reform Commission ("NDRC"), the CSRC and various local regulators.
  3. Private placement of equity securities by non-publicly listed companies: This is a regulatory gray area and no definitive regulation has been set for such capital raising activity.

Excerpted from Bloomberg BNA World Securities Law Report, Vol. 21, Number 3. To read the full article, click here.

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