The China Securities Regulatory Commission ("CSRC") has recently unveiled the H-share "full circulation" reform with the promulgation of the Guidelines on Applying for “Full Circulation” of Unlisted Domestic Shares of H-share Listed Companies (CSRC Circular [2019] No. 22, issued on November 14, 2019, the "Guidelines") and publication on the CSRC website of official answers to questions related to the reform, the CSRC Spokesperson's Press Conference Q&A Regarding the Comprehensive Launch of the“Full Circulation" Reform for H-share Listed Companies (the "CSRC Q&A").
The "full circulation" of H-share listed companies has been a long-discussed topic. Prior to the pilot implementation of the reform, domestic companies listed on the H-share market could not publicly trade their domestic unlisted shares on the Hong Kong Stock Exchange, thereby restricting the overall liquidity of the companies’ shares and also, to a certain extent, causing the Hong Kong Stock Exchange to become less attractive as an IPO location for domestic companies.
