US market Regulators on Thursday announced the adoption of a rule allowing them to delist foreign companies wall Street exchanges if they fail to provide information to the auditors, primarily aimed at Chinese companies,
The Securities and Exchange Commission (SEC) said the mandate requires companies to disclose whether they are “owned or controlled” by the government.
Congress last year passed a law specifically targeting Chinese companies that requires the Public Company Accounting Oversight Board (PCAOB) to be able to oversee audits of foreign firms listed on US markets.
The law also requires companies to name any Chinese Communist Party members on their boards of directors.
Beijing has refused to allow PCAOB to oversee audits of companies registered in China and Hong Kong.
SEC Chairman Gary Gensler said in a statement, “We have a fundamental deal in our securities regime.
“The Commission and the PCAOB will continue to work closely to ensure that auditors of foreign companies with access to US capital markets act in accordance with our regulations,” he said. “We hope that foreign governments … will take action to make this possible.”
The SEC said there are about 220 firms located in the jurisdiction with barriers to PCAOB oversight.
Beijing has asked “Chinese Uber” Didi to step down from Wall Street, according to a Bloomberg report.
On Thursday, Alibaba’s share price hit its lowest level in more than four years on rumors the Chinese e-commerce giant would exit US indices.
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