CHINA’S securities regulator has issued draft rules that would scrap profitability requirements in merger and acquisition deals involving listed companies, as part of wider efforts to help corporate restructuring in a slowing economy. The China Securities Regulatory Commission (CSRC) on Thursday also ease funding channels for listed firms to improve their cash flows and encourage companies in the high-tech sector and new strategic industries to restructure. Under current economic conditions, some companies have been suffering operational difficulties and declining business and need to improve their asset quality through mergers and acquisitions, the CSRC said. “This will further improve the quality of listed firms and boost market vitality,” the regulator said, adding that it is soliciting public opinions until July 20. Analysts said the new rules are aimed at rolling back stringent rules set in 2016 to contain market speculation through restructuring and back-door listings, which blocked some companies’ efforts to improve their asset quality through restructuring. Chinese firms are in need of more funding channels at a time when the world’s second-largest economy is slowing as it engages in an escalating trade war with the United States. (SD-Agencies) |