Besides the current section which a historic review of direct overseas listing of Chinese enterprises, there are five sections in this article. The second section outlines the regulatory framework. The third section sums up and analyzes the problems existing in the regulatory framework. The fourth section expounds the objectives and principles of the domestic regulation over direct overseas listing and gives a series of policy recommendations for improving the regulatory work. The last section draws the conclusions.

　　China’s Regulatory Framework for Direct Overseas Listing

　　With the practice of direct overseas listing of domestic enterprises, China gradually established the regulatory framework from scratch based on the PRC Company Law （1993）。

　　At the early stage, the legal basis governing direct overseas listing was clarified. （i） The relevant regulations stipulate explicitly that direct overseas listing has to be approved by the competent department. Article 6 of the Provisional Regulations on the Administration of Share Issuance and Trading （hereinafter the ‘Provisional Regulations’）[6] stipulates that: “……A domestic enterprise must obtain approval from the Securities Commission of the PRC State Council （SCSC） before it directly or indirectly issue shares abroad or has its shares to be traded abroad. The specific measures with respect thereto shall be formulated separately.”[7] The PRC Securities Law （1998）[8] and the PRC Securities Law （2004 Revision）[9] have similar provisions. （ii） The corresponding regulatory review and approval basis was clarified. Article 85 of the PRC Company Law （1993）[10] stipulates that: “A joint-stock limited company may make a public offer of shares abroad upon the approval of the securities regulatory department of the PRC State Council. The specific measures shall be specially prescribed by the PRC State Council.” The PRC Company Law （1999 Revision）[11] and the PRC Company Law （2004 Revision）[12] have similar provisions. However, it is important to note that Article 238 of the PRC Securities Law （2005 Revision）[13] stipulates that: “Any domestic enterprise that directly or indirectly issues any securities abroad or lists its securities abroad for trading shall be subject to the approval of the securities regulatory authority under the PRC State Council according to the relevant provisions of the PRC State Council. ” As such, the legal basis for the domestic review and approval of DIRECT OVERSEAS LISTING is no longer the “special provisions”， but the “provisions” of the PRC State Council. （iii） The legislative model for the above legal basis was adjusted. Before 2006, the legal basis for the regulation over direct overseas listing was concurrently embodied in China’s company law and securities law, i.e. the PRC Company Law （1993）， the PRC Company Law （1999 Revision）， the PRC Company Law （2004 Revision） the PRC Securities Law （1998） and the PRC Securities Law （2004 Revision）。 However, the PRC Company Law （2005 Revision） does not prescribe any rule relating to direct overseas listing. In addition, Chapter II （Securities Issuance） of the main text of the PRC Securities Law （1998） as well as the PRC Securities Law （2004 Revision） contains provisions governing direct overseas listing, but the PRC Securities Law （2005 Revision） moves the above clause from the main text to Chapter XII （Supplementary Provisions）。 This implicitly reflects the attitude of the Chinese legislative authority on the applicable law of direct overseas listing, which means that direct overseas listing does not belong to the scope to be adjusted by the company law of the PRC Mainland, and in principle, the securities law of the PRC Mainland shall not apply.

　　Secondly, in accordance with the provisions of Article 85 of the PRC Company Law （1993）， the PRC State Council enacted the Special Provisions which lay down a series of special provisions or provisions inconsistent with those in the PRC Company Law （1993） with respect to the minimum number of promoters of H-share companies, qualification of H shares investors, law application and dispute resolution.[14]

　　Thirdly, in order to regulate the corporate governance and the organizational behaviour of H-share companies, the SCSC and the original State Commission for Restructuring the Economic System（SCRES） [15] jointly promulgated the Mandatory Provisions for Articles of Association of Companies to be Listed Overseas （hereinafter the “Mandatory Provisions”）[16] in accordance with the relevant provisions of the PRC Company Law （1993） and the Special Provisions. The Mandatory Provisions lay down uniform provisions on the important content in the Articles of Association of H-share companies.

　　Fourthly, the CSRC issued two regulatory documents to easablish the core regulations（including the overseas listing conditions, and the application, review and approval procedures） for direct overseas listing. On one hand, the Notice on Issues Relating to Enterprises’ Applications for Overseas Listing （hereinafter the “Notice on Listing on Overseas Main Board”）[17] is applicable to direct overseas listing on the main boards of overseas stock exchanges.On the other hand, the Guidelines on the Vetting and Regulation of Applications for Listing on the GEM in Hong Kong by Domestic Enterprises （hereinafter the “Guidelines on Listing on the HKGEM”）[18] is applicable to direct overseas listing on the GEM of the HKEX.