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Investors are likely to cheer a new rule proposed by China’s market watchdog on stock offerings by local companies in offshore markets, potentially removing a major regulatory overhang hobbling the nation’s biggest tech stocks.

The China Securities Regulatory Commission (CSRC) said it will allow companies to sell shares overseas as long as they register their plans with regulators, according to a draft released on December 24.

It also allows mainland-incorporated firms to directly list overseas without the need for a so-called variable-interest entity (VIE) structure if they meet compliance requirements.

“The draft rule ends months of speculation about China’s stance on VIEs, and it turns out to be friendly to those cash-starved tech companies and foreign funds,” said Cao Hua, a partner at private-equity firm Unity Asset Management.

“At least companies that previously looked to list shares abroad via the VIE structure can stick to their fundraising plans and focus on business growth.”

The move could also inject some confidence in Hong Kong’s stock market, the world’s worst performer this year.