news, china, us-listed chinese stocks, us-china relations, joe biden’s china policy, financial regulation, ipo, chinese firms should face faster us stock delisting over audit rules, sec chairman gary gensler tells lawmakers

The chairman of the Securities and Exchange Commission on Tuesday urged Chinese firms to comply with American auditing rules and said the agency supported legislation that would allow for faster delisting.

Gary Gensler, testifying before the Senate Committee on Banking, Housing and Urban Affairs, said that the agency has “had discussions directly with the Chinese authorities” about the potential speeding up of delisting and that “the clock is ticking”.

The bill – the Accelerating Holding Foreign Companies Accountable Act – would reduce the amount of time US-traded Chinese companies have to hand over their audits to US regulators to two years from three years before they can be delisted from American exchanges.

The Senate passed the bill in June but the House of Representatives has yet to vote on it.

Senator John Kennedy, a Republican from Louisiana and one of the bill’s sponsors, said on Tuesday that they were “having a little trouble getting the House to take it up” and asked Gensler if he would ask members of the lower chamber to vote on the measure.

Gensler said he “has expressed his support for the legislation” and “has already had some discussions” with House leadership.

The SEC has come under pressure from lawmakers and the financial industry to force Chinese companies to improve disclosure standards. Last year, the Holding Foreign Companies Accountable Act was passed and became law, starting a three-year countdown for Chinese companies to comply with auditing rules.

The SEC’s “realm is implementation”, said Andrew Bishop, head of policy research at Signum Global Advisors. Gensler “probably won’t spend much time actively pushing for the law’s passage”, but he adheres to the view “on a very consensual issue in the US”, Bishop said.

In a Wall Street Journal opinion article published on Monday, Gensler said: “Unless China’s companies abide by the rules, their shares won’t be able to trade in the US.”

In Tuesday’s testimony, Gensler continues to stress the importance of compliance. “Now it’s up to Beijing to let the oversight board in so we can ensure the relevant audits are up to US standards,” he said.

He said that by early next year he expected to announce the companies using an auditor that doesn’t open its books to US overseers.

news, china, us-listed chinese stocks, us-china relations, joe biden’s china policy, financial regulation, ipo, chinese firms should face faster us stock delisting over audit rules, sec chairman gary gensler tells lawmakers

Senator Elizabeth Warren, Democrat of Massachusetts, speaks with SEC Chairman Gary Gensler before the oversight hearing on Tuesday. Photo: AP

“If these companies use an audit firm in a non-compliant jurisdiction for two more years consecutively, their shares will be prohibited from trading in our capital markets beginning in 2024,” he wrote, referring to the current three-year compliance deadline.

In prepared written testimony on Tuesday, Gensler said that China and Hong Kong were the only ones that refused to agree to abide by the 2002 Sarbanes-Oxley Act, which requires foreign companies wanting to issue public stock in the US to hand over audits to regulators.

His testimony came weeks after the SEC put a “pause” on Chinese share offerings in the US. The agency said companies would be required to disclose clearly the fact that shares would be sold through shell companies outside China, known as variable interest entities, or VIEs.

The arrangement had helped companies bypass Beijing’s restrictions on overseas listings in certain sectors. But under that structure, US investors were buying securities from overseas entities that did not own the underlying assets of operating companies. In case of financial restructuring, investors in the US could have limited recourse to access their assets and be reimbursed.

In late July, the SEC required the listing firms to describe the shell company differently from the China-based operating company and make their financial connections clear to investors. The listing firms would also need to state the risks investors might face in the event of regulatory pressure from the Chinese government.

In addition, companies need to disclose whether Chinese authorities have approved or denied their applications to list on US exchanges, as well as the risks associated with potential denials.

Latest breaking 24h news around the world Latest breaking 24h news around the world - Page 2 Latest breaking 24h news around the world - Page 3


LATEST NEWS

China Evergrande's carmaking unit says it is suspending some new energy vehicle projects due to fund shortage

Evergrande debt: Hui Ka-yan's childhood dreams fuelled a debt binge and audacious goal that has left the world on tenterhooks

Bordeaux wines topple Hermes' Birkin bags, Scotch whisky as top luxury investment during pandemic

How China's Belt and Road Initiative could benefit from Ig Nobel Prize-winning research

HNA's founder Chen Feng, chief executive Adam Tan Xiaodong, detained by police as aviation group is broken into four units

Chinese firms warn of hit to bottom line as provinces introduce power cuts to meet energy consumption targets

HSBC, UBS among big banks to have cut exposure to China Evergrande as outlook worsens for debt-stricken developer

HSBC, Bank of China among five lenders to complete deals as southbound Bond Connect debuts

Richard Li-backed FWD insurance group publicly files for US IPO

Hong Kong stocks set for weekly loss as Evergrande sell-off prolongs amid silence on debt status

China Evergrande: from ‘controlled demolition' to near-certain default and state takeover, money managers outline views on unfolding debt crisis

Evergrande crisis is not entirely to blame for global market jitters

China's US$1.24 billion sovereign bond draws strong demand in Hong Kong on eve of southbound Bond Connect launch

Owner of TamJai, SamGor rice noodle restaurants aims for HK$1.4 billion in Hong Kong IPO

Climate change: Hong Kong utility CLP scales up zero emissions goal, says ‘impact on electricity price won't be as much as people fear'

Computers bungle basic math to show erroneous data of bitcoin's 90 per cent crash on Pyth

NEWS RELATED

China's New Space Station To Get First Woman Onboard

(Photo : Image from Commons.Wikipedia.com) China’s New Space Station to Get First Woman Onboard | Introducing Wang Yaping One of the few Chinese women astronauts is now expected to be named among the whole crew of the upcoming Shenzhou 13 mission that is to land on the Chinese space station.…

Read more: China's New Space Station To Get First Woman Onboard

Meng's surprise release may not improve China's relationship with US or Canada, analysts say

The surprise agreement between US prosecutors and Huawei Technologies Co. executive Meng Wanzhou that allows Meng to return to China after nearly three years of detention in Canada will not reset strained relations among the three nations any time soon, analysts said Even if China releases Michael Spavor and Michael…

Read more: Meng's surprise release may not improve China's relationship with US or Canada, analysts say

GM invests in Chinese autonomous driving startup Momenta

FILE PHOTO: The company logo of Chinese autonomous driving startup Momenta is seen on the facade of its office building in Beijing, China March 13, 2020. Picture taken March 13, 2020. REUTERS/Yilei Sun General Motors Co said on Thursday it will invest $300 million in Chinese autonomous driving startup Momenta…

Read more: GM invests in Chinese autonomous driving startup Momenta

UK Reveals 10-Year Plan to Boost AI in the Country, Wants to Beat China and US

(Photo : GettlyImages/ Cameron Spencer) Artificial intelligence The United Kingdom government released its 10-year plan to make them the global “artificial intelligence superpower.” They are gearing up to go head to head with other countries like China and the United States. U.K. to Boost A.I. The announcement was made on…

Read more: UK Reveals 10-Year Plan to Boost AI in the Country, Wants to Beat China and US

US takes new step on delisting Chinese companies from stock exchanges for audit violations

The US Securities and Exchange Commission adopted a new rule on Wednesday that will help the agency force companies flouting US audit regulations to delist from US exchanges, a move that threatens hundreds of Chinese businesses. According to the rule, which was first proposed in May followed by two months…

Read more: US takes new step on delisting Chinese companies from stock exchanges for audit violations

Parents in China laud gaming restrictions on kids

Li Zhanguo’s two children, ages 4 and 8, don’t have their own smartphones, but like millions of other Chinese children, they are no strangers to online gaming. “If my children get their hands on our mobile phones or an iPad, and if we don’t closely monitor their screen time, they…

Read more: Parents in China laud gaming restrictions on kids

Elon Musk Wants US and China's Cooperation on Space Missions, Would It Be a Collab for SpaceX, CNSA?

Elon Musk wants “some cooperation” from the US and the Chinese government with regards to the journey and preparations in going to space, something which is extremely popular these days. It is known that NASA and the US are some of the most popular in the world, but other countries…

Read more: Elon Musk Wants US and China's Cooperation on Space Missions, Would It Be a Collab for SpaceX, CNSA?

TikTok Owner ByteDance is Limiting Screen Time For Douyin Users Under 14; Restriction Unavailable in the US at the Moment

Douyin, the Chinese version of the popular video-sharing platform TikTok has set a limitation for young users in China through its “Youth Mode.” Company owner ByteDance said that it would now limit the screen time for users who are under 14 years old. The daily usage should only be 40…

Read more: TikTok Owner ByteDance is Limiting Screen Time For Douyin Users Under 14; Restriction Unavailable in the US at the Moment

China plans tax crackdown on richest entertainers, including online influencers

Amazon Clarifies Not Targeting China After Deleting 3,000 Chinese Online Stores With Fake Reviews

Pre-orders for iPhone 13 outpace iPhone 12 in China

China sets up platform to report gaming firm violations

China Slows Game Approvals as it Re-Evaluates Titles for Protection of Children

Jingjia Micro Prepares to Unveil Two GPUs; One Could Reportedly Match GeForce GTX 1080, AMD RX Vega 64

China slows game approvals to enforce tough new rules: Report

China-Linked Espionage Group 'GrayFly' Has Connection to Sidewalk Malware, According to Cybsersecurity Researchers

OTHER NEWS