Chinese regulator seeks to avoid U.S. delisting of Chinese companies Reuters

© Reuters. File picture: On July 9, 2021, a Chinese national flag flies outside the China Securities Regulatory Commission building on Financial Street in Beijing, China. REUTERS/Tingshu Wang

Scott Murdoch

HONG KONG (Reuters)-A Chinese regulator said on Thursday that Chinese authorities are working with their American counterparts to prevent Chinese companies from delisting from the U.S. stock exchange as long-term disputes over audit standards continue.

If the audit of a foreign company does not meet U.S. standards, the US authorities are working to kick the foreign company out of the https://www.reuters.com/article/us-usa-sec-foreigncompanies-idUSKBN2BG2AI American Stock Exchange.

The Public Company Accounting Oversight Board (PCAOB) and U.S. policymakers have long complained that Chinese companies listed in the U.S. cannot obtain audit work papers. The Chinese authorities have been reluctant to allow overseas regulators to inspect the working papers of local accounting firms on the grounds of national security.

Shen Bing, director of the International Department of the China Securities Regulatory Commission, said: “We believe that the delisting of Chinese companies from the US market is not a good thing for companies, global investors, or Sino-US relations.” A meeting in Hong Kong Said.

“We are working hard to resolve audit issues with our American counterparts, and communication is smooth and open at the moment. These companies are at risk of delisting, but we are working hard to prevent this from happening,” he added.

In December 2020, in the final weeks of his administration, President Donald Trump signed a law designed to remove foreign companies from U.S. exchanges that have failed to comply with U.S. auditing standards for three consecutive years.

The legislation was implemented by PCAOB in September. The map on the organization’s website https://pcaobus.org/oversight/international shows that China is the only jurisdiction that refuses PCAOB to “perform necessary supervision.”

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