China regulator seeks to avoid delisting of Chinese firms from US exchanges
A Chinese regulatory official said on Thursday that Chinese officials are working with US colleagues to avoid Chinese companies from being delisted from US stock exchanges, as a long-running disagreement over auditing standards continues.If international businesses’ audits fail to meet US criteria, US authorities are considering delisting them from American stock markets.
Access to audit working papers for US-listed Chinese companies has long been a source of contention for the Public Company Accounting Oversight Board (PCAOB) and US policymakers. Chinese officials have been hesitant to allow foreign regulators to inspect working papers from domestic accounting firms, citing national security concerns.”We do not believe that delisting Chinese companies from the US market is beneficial to the companies, global investors, or Chinese-US relations,” Shen Bing, director general of the China Securities Regulatory Commission’s department of international affairs, said at a conference in Hong Kong.
“We are working very hard with our US counterparts to remedy the auditing issue, and communication is now seamless and transparent. There is a possibility that these companies will be delisted, but we are trying extremely hard to avoid this, “Added he.
President Donald Trump signed a measure in December 2020, during the final weeks of his presidency, that would bar foreign businesses from trading on US exchanges if they failed to meet American auditing criteria for three years in a row.
Foreign firms that do not comply with US auditing standards would be kicked off American stock exchanges, according to US authorities, laws that would currently affect numerous Chinese enterprises.Shen Bing, director general of the China Securities Regulatory Commission’s department of foreign affairs, told a conference in Hong Kong that the regulator was in constant contact with US authorities to resolve the issue of delisting, and that the agency was working hard to do so.
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