UK Lawmakers Warn Regulator Over Shein’s Alleged Bid to Soften Listing Rules

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Jul 12, 2025 - 10:06 Updated: Jul 12, 2025 - 10:01
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UK Lawmakers Warn Regulator Over Shein’s Alleged Bid to Soften Listing Rules
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A UK parliamentary committee sounded the alarm on Thursday following allegations that fashion retailer Shein tried to push the country’s financial regulator to soften rules so the company could be listed on the London Stock Exchange.

In a letter to the Financial Conduct Authority (FCA), Business and Trade Committee Chair Liam Byrne said the committee would be “deeply concerned by any watering down of disclosure requirements, especially in cases involving potential violations of international human rights standards.”

Any relaxing of rules would “compromise the integrity of the UK’s listing regime ... [and] risk reputational damage to the UK’s financial markets, and undermine investor confidence that the UK was determined to champion only the highest international labour standards,” he wrote.

Shein, which was founded in China and is now based in Singapore, has disrupted the fast-fashion industry by shipping cheap clothes directly from factories in China to overseas shoppers, including in the UK and the United States.

After facing regulatory hurdles and pushback from U.S. lawmakers in its attempts to list in New York, Shein failed to win Chinese securities regulatory approval to proceed with a London initial public offering.

The company’s plan to list in London has also been met with scrutiny over concerns that its garments may involve the forced labor of Uyghur Muslims in China’s Xinjiang region.
Byrne’s letter to the FCA followed a report by the Financial Times that found British and Chinese regulators disagreed over language used in the risk disclosure section of Shein’s prospectus, and that the company had recently filed a draft prospectus with Hong Kong’s exchange (HKEX) in a bid to force the FCA to relax its rules.

The Epoch Times reached out to Shein and the HKEX for comment and did not receive a response by the time of publishing.

The FCA declined to comment on individual applications.

Under UK regulations, publicly listed companies are required to disclose risk factors to investors, according to the UK parliamentary committee’s letter. The FCA doesn’t conduct detailed checks of the facts stated in the prospectuses, but it can investigate a company after a prospectus is published and issue punishment if the document is found to contain misleading statements.

In a previous letter to Byrne, FCA Chief Executive Nikhil Rathi said whether the regulator would expect a company to disclose the potential exposure to sourcing materials from Xinjiang depends “largely on the legal risk the exposure in question presents.”

He cited two cases in which the disclosure of such exposure is required because the jurisdictions restricted the sourcing of materials from Xinjiang, including the United States’ Uyghur Forced Labor Prevention Act (UFLPA) which banned the importing of products from anything mined, produced, or manufactured wholly or in part in Xinjiang, unless they can prove that no forced labor is involved.

The EU has also adopted the Forced Labour Regulation, which comes into effect in 2027, but it remains to be seen what guidelines the bloc will issue under the law, Rathi said.

Campaigners have previously called on British lawmakers to close the gap between UK and U.S. legislation, saying it has turned the UK into a “dumping ground” of Uyghur forced labor products.

Uyghurs have been subjected to mass detention in China, with an estimated 1 million or more placed in a sprawling network of internment camps and other detention facilities in Xinjiang.

Survivors of the camps have described experiencing forced labor, forced sterilizations, political indoctrination, and other abuses during their time in detention.

According to The Epoch Times’ analysis of data published by China’s National Bureau of Statistics, in the past three years, more than 9o percent of cotton produced in China came from Xinjiang.

A UK parliamentary committee sounded the alarm on Thursday following allegations that fashion retailer Shein tried to push the country’s financial regulator to soften rules so the company could be listed on the London Stock Exchange.

In a letter to the Financial Conduct Authority (FCA), Business and Trade Committee Chair Liam Byrne said the committee would be “deeply concerned by any watering down of disclosure requirements, especially in cases involving potential violations of international human rights standards.”

Any relaxing of rules would “compromise the integrity of the UK’s listing regime ... [and] risk reputational damage to the UK’s financial markets, and undermine investor confidence that the UK was determined to champion only the highest international labour standards,” he wrote.

Shein, which was founded in China and is now based in Singapore, has disrupted the fast-fashion industry by shipping cheap clothes directly from factories in China to overseas shoppers, including in the UK and the United States.

After facing regulatory hurdles and pushback from U.S. lawmakers in its attempts to list in New York, Shein failed to win Chinese securities regulatory approval to proceed with a London initial public offering.

The company’s plan to list in London has also been met with scrutiny over concerns that its garments may involve the forced labor of Uyghur Muslims in China’s Xinjiang region.
Byrne’s letter to the FCA followed a report by the Financial Times that found British and Chinese regulators disagreed over language used in the risk disclosure section of Shein’s prospectus, and that the company had recently filed a draft prospectus with Hong Kong’s exchange (HKEX) in a bid to force the FCA to relax its rules.

The Epoch Times reached out to Shein and the HKEX for comment and did not receive a response by the time of publishing.

The FCA declined to comment on individual applications.

Under UK regulations, publicly listed companies are required to disclose risk factors to investors, according to the UK parliamentary committee’s letter. The FCA doesn’t conduct detailed checks of the facts stated in the prospectuses, but it can investigate a company after a prospectus is published and issue punishment if the document is found to contain misleading statements.

In a previous letter to Byrne, FCA Chief Executive Nikhil Rathi said whether the regulator would expect a company to disclose the potential exposure to sourcing materials from Xinjiang depends “largely on the legal risk the exposure in question presents.”

He cited two cases in which the disclosure of such exposure is required because the jurisdictions restricted the sourcing of materials from Xinjiang, including the United States’ Uyghur Forced Labor Prevention Act (UFLPA) which banned the importing of products from anything mined, produced, or manufactured wholly or in part in Xinjiang, unless they can prove that no forced labor is involved.

The EU has also adopted the Forced Labour Regulation, which comes into effect in 2027, but it remains to be seen what guidelines the bloc will issue under the law, Rathi said.

Campaigners have previously called on British lawmakers to close the gap between UK and U.S. legislation, saying it has turned the UK into a “dumping ground” of Uyghur forced labor products.

Uyghurs have been subjected to mass detention in China, with an estimated 1 million or more placed in a sprawling network of internment camps and other detention facilities in Xinjiang.

Survivors of the camps have described experiencing forced labor, forced sterilizations, political indoctrination, and other abuses during their time in detention.

Shein previously told The Epoch Times it has “a zero-tolerance policy for forced labor“ and requires contract manufacturers to ”only source materials from approved regions.”
In a Jan. 20 letter to Byrne, Yinan Zhu, Shein’s general counsel for Europe, provided a list of regions where Shein’s Chinese suppliers are based. The list included all province-level regions in China, with the exception of Xinjiang and Macau.

She said the company doesn’t ban “the use of Chinese cotton in our products specifically where such use would not contravene the laws and regulations of the jurisdictions in which we operate.”

According to Zhu, to comply with the UFLPA, Shein is working with due diligence company Oritain, which in 2024 found 1.3 percent of Shein’s cotton tested positive for unapproved cotton.

She also said Shein requires its upstream fabric suppliers to pledge that they “only source cotton from regions that are approved and comply with relevant local laws” and require contract manufacturers to “only source such material from such designated upstream suppliers for products that are to be sold (often amongst other markets) into the United States.”

The Epoch Times reached out to Oritain for comment.

PA Media and Reuters contributed to this report.
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