Lufax Is Latest Chinese Firm To File For US IPO As Crackdown Looms

Online wealth management platform Lufax is the latest to file plans for an IPO in the United States as Chinese firms rush to go public before tough new federal disclosure rules go into effect.

A unit of Ping An Insurance Group, Lufax filed confidential paperwork with the U.S. Securities and Exchange Commission (SEC) on Monday (Aug. 12), setting into motion plans for an IPO in the next two months, the Nikkei Asian Review reports.

The move comes as Treasury Secretary Steven Mnuchin warns that Chinese firms that want to be listed on U.S. stock exchanges will have to conform to U.S. auditing standards by the end of next year. That includes opening up their audit records to U.S. regulators, a move that would put the firms into conflict with secrecy laws in China.

Lufax is one of just a number of Chinese firms rushing to file their IPO paperwork with the SEC. Chinese real estate company KE Holdings, which filed its U.S. IPO on July 24, and XPeng, a producer of electric automobiles, are among the companies scrambling to beat the looming deadline.

“The strong demand for quality Chinese names among U.S. investors gives us confidence to proceed with the IPO plan despite the impending crackdown by U.S. authorities,” an adviser to Lufax told the Nikkei Asian Review. “Time is of the essence, and we are racing ahead to ensure the transaction goes ahead smoothly.”

Lufax, which hopes to raise $3 billion with its IPO, has shifted away from peer-to-peer lending to focus on wealth management and retail lending. Parent company Ping An Insurance had previously planned on listing Lufax on the Hong Kong stock exchange in 2018, but pulled back after changes to Chinese regulations regarding consumer lending.

The Nikkei Asia Review, citing Dealogic, has pegged the value of IPOs by Chinese companies at $4 billion in 2019.