Wall Street's IPO fee machine under threat after regulatory scrutiny

The heavier deal flow has provided an uptick in fees to the banks

China’s regulatory crackdown threatens to reverse a surge in underwriting fees for US investment banks like Goldman Sachs Group Inc., Bank of America Corp. and Morgan Stanley.

Companies based in China have been the most prolific foreign issuers of equity in New York during the pandemic. But the budding $50 billion flow of US initial public offerings and secondary stock sales is at risk after new regulatory scrutiny surrounding cybersecurity firms.

“China’s increased oversight of overseas listings by Chinese companies, announced by the State Council on July 6, could halt unicorn listings in 2H in Hong Kong and the U.S,” Bloomberg Intelligence