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China to relax rules on foreign investment in A-share markets

Chinese authorities plans to relax rules on foreign investments in its domestic A-share market, according to a draft published on Monday by the Ministry of Commerce, the China Securities Regulatory Commission and other related regulators.

According to the draft, the authorities proposed to cut the lock-up period for strategic investments in A-share listed companies to 12 months from current three years.

Meanwhile, it’s proposed to lower the financial requirements for eligible foreign investors to own $50 million in assets or to manage $300 million or more in assets, compared to current $100 million and $500 million respectively.

The statement said draft rules would apply to “strategic investment” made by foreign investors to obtain and hold for a certain period of time listed companies’ A-shares through agreements, the issuance of new shares, tender offers and other means as stipulated by laws and regulations.

The move is viewed as a move to boost China’s domestic stock market which officially entered a bear market last month amid escalating trade tensions with the United States.

The public consultation period for the proposed rules runs until Aug. 29, the statement said.

 

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