China lays out new path for cornerstones to HK IPOs
Cornerstone investors taking up huge chunks of Hong Kong IPOs have caused much controversy in recent years, but that looks set to change. China’s foreign exchange regulator has provided a new route for investing in the city’s listings, which is expected to diversify the pool of potential cornerstones beyond the typical state-owned enterprises, and friends and family investors. Jonathan Breen reports.
The new system, being implemented by the State Administration of Foreign Exchange (Safe), is based on foreign exchange quotas. It allows onshore investors to participate in Hong Kong IPOs by Chinese companies as cornerstones as long as they agree to various conditions.
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