US moves a step closer to delisting Chinese companies on American stock exchanges
- The SEC is seeking a new law that mandates foreign companies open their books to US scrutiny or risk being kicked off the NYSE and Nasdaq
- China and Hong Kong are the only two jurisdictions that refuse to allow the inspections despite Washington requiring them since 2002
The US government is inching further on efforts to boot Chinese companies off American stock exchanges for not complying with Washington’s disclosure requirements.
The Securities and Exchange Commission on Thursday announced its final plan for putting in place a new law that mandates foreign companies open their books to US scrutiny or risk being kicked off the New York Stock Exchange and Nasdaq within three years.
China and Hong Kong are the only two jurisdictions that refuse to allow the inspections despite Washington requiring them since 2002.
The SEC’s new rule, which lays out how the regulator will identify companies subject to delisting and the procedure for kicking non-compliant firms off exchanges, is the latest development in a tussle between financial officials in the world’s two biggest economies.
While much of the recent tension has been around the shell companies that Chinese firms use to list in the US, Thursday’s regulation dates back decades.