Effective as of March 31, 2023, the China Securities Regulatory Commission (CSRC) implemented the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Measures”), a new set of regulations to establish a filing-based system for PRC domestic companies seeking to list securities overseas, including in the United States. As of July 2025, these regulations remain highly relevant due to their role in balancing global market access with stringent national security and data protection requirements amid ongoing U.S.-China geopolitical tensions.
High-profile cases like CHAGEE’s successful $411 million Nasdaq IPO in April 2025 and Shein’s stalled London IPO highlight the Trial Measures’ impact on listing strategies, while the CSRC’s push for high-quality listings in strategic sectors and encouragement of Hong Kong as an alternative venue underscore their influence on navigating regulatory complexities and market dynamics. This article provides a comprehensive overview of the key requirements, implications, and compliance steps for U.S. listings, helping companies navigate this evolving regulatory framework.
The Trial Measures apply to both direct and indirect overseas listings and cover initial public offerings (IPOs), follow-on offerings, and certain M&A activities.
PRC companies pursuing a U.S. listing must comply with the following CSRC filing procedures:
Companies are required to file with the CSRC within three working days after submitting a listing application to the U.S. Securities and Exchange Commission (SEC) or other relevant overseas regulator. For subsequent offerings in the same market, filing must occur within three working days after the offering is completed.
The required documents include a filing report detailing the offering and listing plan, a PRC legal opinion confirming compliance with Chinese laws, shareholder information ensuring transparency and accuracy, and, for VIE-structured companies, a report outlining the VIE structure, associated risks, and mitigation measures.
The CSRC reviews filings within 20 working days if documents are complete and compliant, publishing results on its website. If filings are incomplete, the CSRC issues a request for supplementation within five working days, and issuers have 30 days to respond.
Companies must report significant events (i.e. change of control, investigations by overseas regulators, or delisting) within three working days of public disclosure.
The Trial Measures place significant emphasis on national security and data protection. Companies whose listings may endanger national security are prohibited from listing overseas. Compliance with PRC data security and national secrecy laws is mandatory, particularly for data-intensive industries like technology. In some cases, clearance from authorities such as the Cyberspace Administration of China may be required before CSRC filings can proceed.
The Trial Measures include transitional provisions for companies already listed or in the process of listing. Companies listed in the U.S. before March 31, 2023, are exempt from immediate filing but must file for refinancing or other specified activities. Additionally, companies with SEC-approved registration statements before March 31, 2023, that complete their listing by September 30, 2023, are exempt from initial filing requirements.
Securities firms acting as sponsors or lead underwriters for U.S. listings face additional responsibilities. They must file with the CSRC within 10 working days of signing an engagement agreement with the issuer and submit an annual report by January 31 detailing activities related to PRC companies’ overseas listings. Non-compliance, such as failing to ensure issuer compliance or misrepresenting documents, may result in fines ranging from RMB 500,000 to RMB 5,000,000 for firms and RMB 200,000 to RMB 2,000,000 for responsible individuals.
Variable Interest Entity (VIE) structures, commonly used by Chinese firms like Alibaba and JD.com for U.S. listings, are subject to specific scrutiny. Companies must disclose VIE arrangements in their CSRC filings, including risks and mitigation strategies. Pre-filing consultations with the CSRC are available to clarify VIE compliance.
Violations of the Trial Measures, such as fabricating documents or bypassing filing requirements, may lead to administrative measures like correction orders, regulatory talks, or warning letters. Fines may be imposed on securities firms and individuals, as previously noted. Additionally, violations may be referred to U.S. regulators, such as the SEC, for cross-border enforcement.
To navigate the CSRC’s requirements effectively, companies should consider several strategic steps. Incorporating CSRC filing timelines into U.S. listing schedules is critical to avoid delays, as the 20-day review period may impact IPO planning. Engaging PRC legal counsel early ensures compliance with filing requirements and national security reviews. For VIE-structured companies, proactive CSRC consultations can mitigate regulatory risks. The December 2022 audit inspection agreement between the U.S. and China has reduced delisting risks for Chinese companies on U.S. exchanges, enhancing confidence in U.S. listings.
Additionally, CSRC’s internal review timelines have lengthened substantially while moving in 2024. Regulators became increasingly concerned with speculative behavior observed in certain low-float, micro-cap IPOs on U.S. exchanges. While the Trial Measures initially provided for a 20-working-day review, in practice, the process can now stretch to six months or more. This change reflects heightened scrutiny over cybersecurity, foreign exchange controls, and the use of variable interest in entity (VIE) structures. Regulators are also closely reviewing employee stock option plans and the use of proceeds for overseas offerings to ensure consistency with PRC regulations.
Despite these tighter controls, the CSRC continues to support offshore listings of high-quality enterprises in strategic sectors. In coordination with financial institutions and investment banks, regulators are actively encouraging companies with meaningful operations, technological capabilities, and long-term capital to pursue legitimate and transparent overseas fundraising.
The implementation of the Trial Measures has led to both successes and setbacks for PRC companies pursuing overseas listings. A prominent success story is CHAGEE Holdings Ltd., a leading Chinese tea brand, which successfully listed on the Nasdaq on April 17, 2025, under the ticker symbol “CHA.” The company raised $411 million by selling 14.7 million American Depositary Shares (ADS) at $28 each, achieving a valuation of $6.2 billion after a 21% share price surge on its debut day. Unlike many Chinese firms, CHAGEE employed a straightforward corporate structure without relying on a Variable Interest Entity (VIE), which likely appealed to investors seeking transparency. This listing, the largest for a Chinese consumer company since RLX Technology’s $1.4 billion IPO in 2021, reflects sustained investor confidence in premium Chinese consumer brands despite U.S.-China trade tensions. CHAGEE’s success highlights the potential for well-prepared companies to navigate the CSRC’s regulatory framework and capitalize on the U.S. market’s liquidity and investor base.
However, not all listings have been successful. Shein, the Chinese fast-fashion giant, which faced delays in its planned London IPO in early 2025. Despite moving its holding structure offshore, Shein encountered regulatory roadblocks due to pending CSRC and national security clearances. Concerns over supply chain due diligence and data practices prompted a pause in its listing plans, leading the company to explore a potential listing in Hong Kong instead. This case underscores the heightened scrutiny PRC companies face under the Trial Measures, particularly in jurisdictions with complex regulatory landscapes.
PRC companies face several persistent challenges under the Trial Measures. One major issue is regulatory uncertainty and prolonged review of timelines. Despite the CSRC’s efforts to streamline processes, many filings experience delays due to unclear internal standards or overlapping requirements with other agencies, such as the Cyberspace Administration of China (CAC) and the Ministry of Commerce. This lack of clarity complicates planning and increases the risk of unexpected hurdles during the listing process.
Data-intensive companies face additional complexities due to the absence of unified data export regulations. Regulators increasingly focus on overseas data flows, encryption practices, and compliance with the PRC Data Security Law, creating significant hurdles for industries like technology. The ambiguity surrounding Variable Interest Entity (VIE) structures, commonly used by Chinese tech firms, further complicates compliance. While VIEs are not prohibited, companies must provide detailed legal opinions, risk disclosures, and engage in pre-filing consultations with the CSRC. However, regulatory interpretations remain case-specific, and no VIE-structured company has completed a CSRC filing without significant clarification of requests, adding to the compliance burden.
While the CSRC has not formally amended the Trial Measures as of July 2025, practical interpretations and policy signals have emerged through administrative guidance and public statements. In May 2025, the CSRC expressed support for U.S. and Hong Kong listings by technology-driven companies, including those not yet profitable, provided they offer robust disclosures and clearly define their capital usage. This stance signals a willingness to facilitate access to global capital markets for innovative firms, even amidst heightened scrutiny.
The CSRC, in coordination with other financial regulators and commercial banks, is also prioritizing high-quality listings, particularly in strategically important sectors like advanced manufacturing and digital services. These efforts aim to fast-track listings for companies deemed critical to China’s economic goals. However, without formal revisions or supplementary rules to the Trial Measures, clarifications are provided on a case-by-case basis through internal consultations or public statements from regulatory officials. This approach, while flexible, contributes to ongoing uncertainty for companies navigating the filing process.
The CSRC’s Trial Measures introduce a streamlined yet rigorous filing system for PRC companies seeking U.S. listings. By prioritizing compliance with filing timelines, national security, and data protection requirements, companies can navigate the process effectively. With the U.S.-China audit dispute resolved and VIE structures accommodated, the U.S. capital market remains an attractive venue for PRC issuers.
At Alarar Capital Group, we leverage our expertise in cross-border IPOs, strategic planning, and regulatory compliance, as demonstrated in Hongli Group’s Nasdaq listing, can guide companies through these complexities by optimizing filing timelines, ensuring data and national security compliance, managing VIE structures, and supporting listing strategies to align with both CSRC and global market requirements.
Author:
Juantao Yap
Analyst
References
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