China Pledges to Give Virus-Hit Companies Easier Access to Capital Markets

COVID-19 - SHANGHAI. Chinese regulators said on Friday they will streamline the process of equity and bond issuance by companies hit by the pandemic, and urged brokerages and fund managers to channel more money into virus-hit areas and sectors.

The China Securities Regulatory Commission (CSRC) also vowed regulatory flexibility when companies cannot meet certain requirements - such as signing documents or meeting in person - due to pandemic-related restrictions.

China is grappling with the biggest COVID-19 outbreak in two years, with full or partial lockdowns in cities such as Shanghai hitting consumption and production, and raising the prospect of economic recession.

The CSRC urged stock and futures exchanges, and other institutions to "make solid efforts to help companies wade through the pandemic."

The CSRC said that profitability requirements will be lowered for virus-hit companies in the vetting of initial public offerings (IPOs), as long as the applicants' operations are deemed sustainable.

Meanwhile, the application process for refinancing, bond sales and asset purchases will be sped up for COVID-hit sectors.

Regulators will also allow companies to use electronic signatures when applying for securities issuance, and extend the deadline for addressing regulatory enquiries.

The CSRC also urged brokerages to underwrite more share and bond sales for companies affected by the virus, and avoid margin calls as much as possible.

For mutual fund houses, the CSRC urged them to actively use their own money to buy funds, and channel more private capital into virus-fighting companies.

Regulators will also accelerate the approval of anti-virus fund products, according to the statement.