China Issues More Rules for Review of Listing on New Tech Board

(Bloomberg) -- Companies should clean up valuation adjustment agreements with private equity and venture capital investors before applying to list on China’s new technology board, according to additional review rules posted on Shanghai Stock Exchange’s website.

Exceptions are allowed in a few instances, including when the valuation adjustment mechanism won’t change the controller of the company or won’t be tied to market capitalization, the exchange said.

If part of the issuer’s assets comes from a listed company, the rules require the underwriters to verify if the asset acquirement process met appropriate laws and regulations, whether the senior management have held any positions at the listed company and if such engagement is compliant.

The new rules came in format of Q&A after the exchange unveiled first batch in early March.

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