People's Bank of China and China's State Administration of Foreign Exchange ease fund management for domestic firms’ overseas listings

The People's Bank of China and China's State Administration of Foreign Exchange jointly issued a notice updating cross-border fund management rules for domestic enterprises listing overseas, aiming to make offshore fundraising and subsequent use of proceeds more efficient. The notice unifies policies for renminbi and foreign-currency funds by allowing overseas listing proceeds and income from share disposals or transfers to be repatriated in either currency, while requiring issuers participating in H-share “full circulation” to pay dividends to domestic shareholders onshore in renminbi. It also permits firms that repatriate proceeds in foreign currency to convert them at their own discretion for domestic use, and allows listed entities to choose their own approaches for managing exchange-rate risk. Procedures are streamlined by supporting banks as the primary channel to directly handle registration for domestic enterprises’ overseas listings, alongside relaxed deadlines for registrations related to initial listings, follow-on issuances, and share reductions. On proceeds management, funds raised offshore and income from share sales are in principle required to be remitted back onshore, and any unused outbound funds for share purchases or failed transactions must be repatriated promptly. The notice also allows enterprises meeting certain conditions to retain proceeds offshore for use.