Global banks are worried about China's initial public offering ban

Global banks are concerned about the Chinese authorities plan to impose stricter rules for public offerings abroad. Officials say the new draft text is "vague" and means Beijing's regulations will go beyond the border.

The largest lobbying group of financial companies in Hong Kong said in a letter to the China Securities Regulatory Commission that the motion would increase costs and "block back" deals. According to the information provided by sources close to the subject, it was stated in the letter that there should be more clarity in the regulation and that the violations should be clearly stated.

China announced in December that it intends to prohibit companies from going public in other countries, closing a legal loophole that tech companies have long exploited to go public in other countries. This is a cause for concern for Wall Street banks and their European rivals, which are looking into areas such as wealth management and investment banking in the world's second-largest economy.

Hundreds of Chinese companies, such as Alibaba and Tencent, have been listed on overseas exchanges over the past two decades. Investment banks have made $6 billion from such deals since 2014.