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Gensler says it’s up to Beijing to grant access to US audit inspectors. Photo: Bloomberg

SEC’s Gensler says it’s unclear if US and China will reach a deal to avoid stock delistings

  • Chinese companies face a 2024 deadline of being kicked off American stock exchanges for lack of access to audit work papers
  • SEC has started adding companies on a provisional list amid measures in Congress to speed up compliance
Securities and Exchange Commission Chair Gary Gensler says it is unclear if American and Chinese authorities will reach a deal to avoid the delisting of some 200 companies from US stock exchanges.

Gensler said on Tuesday that it is ultimately Beijing’s decision whether to grant access to American audit inspectors as required by US law, adding that talks between the two sides had been “constructive.”

“I just really don’t know right now” over the prospects of reaching a deal, he said in an interview. “It’s going to be choices made by the authorities there.”

The clock is ticking to avoid a congressionally-imposed deadline of 2024 for kicking businesses off the New York Stock Exchange and Nasdaq Stock Market unless American regulators get full access to inspect their audit work papers.


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The US and China have been at odds for two decades over the legal requirement, which is meant to protect investors from accounting frauds and other financial malfeasance. The 2024 deadline stems from a 2020 law called the Holding Foreign Companies Accountable Act that was popular with both Democrats and Republicans.

Dozens of other countries permit the US audit inspections, giving officials the go ahead to interview local accountants and scrutinise the documentation underlying their work. China and Hong Kong have refused, citing confidentiality laws and national security concerns.

Earlier this year, the SEC started publishing a “provisional list” of companies that could face removal. While the move had long been telegraphed, it fuelled a sharp decline in US shares of companies based in mainland China and Hong Kong.

Pressure for Beijing and Washington to reach a deal to avoid delistings is being amplified by measures under consideration in the US Congress that call for the process to be accelerated. If those become law, Chinese audit firms would have even less time to comply.

Gensler also discussed cryptocurrency regulation. While he declined to say whether the SEC might release new rules for digital assets, his agency had long-standing authorities to regulate the sector, he added.