China will require domestic firms to repatriate funds raised from overseas listings "in principle" under new rules aimed at tightening oversight of cross-border financing as Beijing seeks to manage financial risks and maintain stability.
"If funds are to be kept overseas for foreign direct investment, overseas securities investment or overseas loans, approval must be obtained before the listing is completed," according to a new guideline jointly issued on Friday by China's central bank and foreign exchange regulator.
Under the new rules, which will take effect on April 1, 2026, dedicated capital accounts must be used for cross-border fund settlements and funds obtained through shareholder transactions including buying or selling overseas-listed shares shall also be repatriated "in principle".
Companies can use either offshore funds or onshore funds to buy back their own shares that are listed overseas.
For H-share "full circulation," a policy that allows all shares of a mainland-incorporated company to become tradable in Hong Kong, related fund transfers must go through ChinaClear's designated accounts and dividends paid to mainland shareholders must be settled in RMB within China rather than through offshore channels, the regulation added.
The new rules also simplify procedures and ease deadlines for registration related to overseas listings to 30 days from 15 days with the Chinese central bank and FX regulator pledging to continue optimising cross-border capital management policies and enhancing convenience of cross-border investment and financing.
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