China eased venture capital rules

On Friday, China’s securities regulator eased rules for venture capital transfer

The country hopes to increase resilience of its economy after it was hit by novel coronavirus outbreak.

The simplified rules mean that private equity investors can now easily venture its capital from companies in a shorter time, even before initial public offerings of start-up firms. Up until now, investors had to remain in start-up firms for a longer time and invest money to e.g. another start-up.

According the China Securities Regulatory Commission (CSRC), venture capital (VC) can be quickly channeled between affected companies, which will help coronavirus-hit economy. The regular believes that if the investor has chance to withdraw from the start-up company before subscription of shares, the investments will be perceived as more attractive.

The changed rules apply on qualified investors, when liquidity pressure could increase and support share sales. Yet, according to the securities regulator, the number of investors in China’s stock exchanges is low and therefore they have no fear of such a scenario.


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