The US securities regulator is pushing ahead with a plan that would require US-listed Chinese companies to use auditors overseen by the US or face delisting from US stock exchanges, reported the South China Morning Post.
The proposal by the Securities and Exchange Commission (SEC) is likely to be open to public comment in December, according to The Wall Street Journal. The regulation is part of a concerted effort to get tough on China as the Trump administration winds down in the coming weeks to mark its legacy on China issues and make certain policies difficult for the incoming Biden administration to unwind.
“While movement regarding the potential delisting of Chinese [American depositary receipts] from US exchanges continues to advance, this is happening slowly and with abundant implementation wiggle room,” said Andrew Bishop, global head of policy research at New York-based Signum Global Advisors.
The new regulation would force Chinese companies that have shares traded on American stock exchanges such as the New York Stock Exchange and Nasdaq to comply with auditing regulations like any other listed company.