The Chairman of SEC: 270 Chinese concept stocks will be forced to delist

  • Translation & commentary: Jenny Ball
  • Editor: JIHO
Profile photo of Gary Gensler, Chairman of the US Securities and Exchange Commission (SEC). (EVELYN HOCKSTEIN/POOL/AFP via Getty Images)

The US Securities and Exchange Commission (SEC) Chairman Gary Gensler recently wrote to the Wall Street Journal that if Chinese companies listed in the US refuse to comply with US audit rules, the SEC will force 270 Chinese stocks to be delisted in early 2024. The SEC is expected to announce a list of relevant companies early next year.

Gensler pointed out in this article entitled “Chinese companies must open the account books” that last year the U.S. Congress passed the “Foreign Company Accountability Act” without objection. The Act stipulated that if a foreign government prohibits the SEC’s “Listed Company Accounting Oversight Board” (PCAOB) from inspecting the auditing for three consecutive years, the listed company will be prohibited from trading in the United States.

Gensler said that the SEC has taken necessary actions to this end, and PCAOB will complete the formulation of relevant rules before the end of this year. The three-year period starts from 2021.

Gensler said that now it is up to Beijing to decide whether to allow PCAOB to go to China and to determine whether the relevant audit meets American standards. The SEC is expected to announce at the beginning of next year which companies’ auditing have not met U.S. verification. If these companies hire non-compliant audit companies for two consecutive years, their shares will be banned from trading in the United States from 2024.

The article also pointed out that the US Senate passed the Accelerated Foreign Companies Accountability Act in June this year. Once the Bill is promulgated, the three-year period will be reduced to two years.

In addition to inspecting and auditing companies, the SEC also hopes that US investors fully understand the risks of investing in Chinese concept stocks. The SEC has recently suspended processing Chinese companies’ IPO applications.

For many years, the CCP government has refused to conduct financial audits of Chinese companies listed in the United States by US regulators on the grounds of “national security.” Wall Street has also been open to the Chinese concept stock network, which has led to a trend of counterfeiting of Chinese concept stocks in the United States, and companies with a CCP background easily collect money in the United States.

The Trump administration requested Chinese companies listed in the United States to accept the same supervision as U.S. companies as per the “Foreign Companies Accountability Act”. This was said to have opened the prelude to the decoupling of Sino-US financial affairs. After the bill was passed, the CCP also tightened its policies to prevent Chinese companies from listing in the United States. Recently, Beijing has strongly suppressed Didi Travel, which went public in the United States, at the meantime Beijing took the opportunity to initiate a round of regulatory storms.

Commentary: This is not crying wolf, this is the real wolf. Although it was revealed by Miles Guo 4 years before, warning the world that all the Chinese companies in US listed or not in Stock market and in the world were all the CCP’s dictator’s families business, it took four years for people in the financial world to discover the fake financial operations of the CCP,  the biggest financial Ponzi scheme defrauded the whole world. What a terrible price to pay as the collapse of the CCP’s finances also means a tsunami in the world economy. I hope people or organization, like the SEC, will quickly prepare for the countermeasures in time.

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