The SEC To Get Much More Strict With Suspicious Chinese Companies

Dec. 6th, 2021

The seal of the U.S. Securities and Exchange Commission (SEC) is seen at their headquarters in Washington, D.C., U.S., May 12, 2021. REUTERS/Andrew Kelly

According to a story by Reuters on December 2nd, 2021, it appears that all  Chinese companies that list on U.S. stock exchanges must disclose whether they are owned or controlled by a government entity, and provide evidence of their auditing inspections, the Securities and Exchange Commission (SEC) said late last week. This new ruling could lead to more than 200 companies being kicked off U.S. exchanges and could make some Chinese companies less attractive to investors. The new rules implement a law passed by Congress in December 2020 that aims to ensure foreign companies listed in the United States, in particular Chinese companies, comply with U.S. rules.

The rule will also require enhanced disclosures from Chinese entities listing in the United States via a vehicle known as a variable interest entity (VIE).

Not surprisingly China has not allowed the SEC’s accounting body, the Public Company Accounting Oversight Board, to inspect its auditors, which in turn certify the accounts of Chinese companies listed in the United States. Chinese authorities are famously reluctant to allow overseas regulators to inspect local accounting firms due to national security concerns. Obviously, this is simply a delaying tactic but by now most governments and officials are wise to the communist regime’s attempts to divert attention from state-owned companies.

For more information about this story please click here:    https://www.reuters.com/business/us-sec-mandates-foreign-companies-spell-out-ownership-structure-disclose-2021-12-02/

Editor: Mr Cow / PR: Mini Cow


Edited by:【Himalaya London Club UK】

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Disclaimer: This article only represents the author’s view. Gnews is not responsible for any legal risks.

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