FAST FIVE: SEC Moves Closer To Delisting Chinese Companies

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SEC Moves Closer To Delisting Chinese Companies Just yesterday, Beijing denied reports that it plans to block domestic Chinese firms from listing abroad (particularly in the US).

It's pretty clear that Beijing won't allow any privately owned Chinese firms (all of which, remember, are still effectively controlled by the state) to provide the Americans with the insight they're demanding.

According to US rules, the firms must submit to audits by approved American auditors (ie the Big Four and a handful of other competitors), and then allow the audits to be reviewed by the PCAOB.

“If you want to issue public securities in the US, the firms that audit your books have to be subject to inspection by the Public Company Accounting Oversight Board,” SEC Chair Gary Gensler said in a statement.

“While more than 50 jurisdictions have worked with the PCAOB to allow the required inspections, two historically have not: China and Hong Kong.” During December 2020, Congress mandated that Chinese companies finally open their books and required the SEC to write rules for the companies that don't comply.

Categories: ZH