China is making it easier for listed companies to buy, sell or swap their assets, in order to streamline bureaucracy and encourage mergers and acquisitions, the China Securities Regulatory Commission (CSRC) has stated.
Under the new rules, listed firms no longer need the regulator's approval when buying, selling or swapping assets, as long as such deals are not conducted for back-door listings, the CSRC said in a statement on its website. The new rules will also allow financial markets to play a bigger role in the pricing of new shares. New shares issued for mergers and acquisitions will reflect the market's demand in their pricing, and companies will have to release their peers' price-to-earnings and price-to-book ratios when they are pricing their own shares.
China will also allow listed companies to fund their mergers and acquisitions with a greater variety of financing instruments, such as preferred stocks or private placements of convertible bonds.