US Securities and Exchange Commission adopts audit inspection guidelines for US-listed Chinese stocks
- A step closer toward implementing a law that says foreign companies face US delisting if they fail to turn over audit results for three straight years
- Watchdog agency says rules establish what information and documents are needed to assess whether a foreign company is in compliance with securities law
The Securities and Exchange Commission on Friday approved a framework to determine which US-listed Chinese companies fail to fully allow auditing inspection and, therefore, will be delisted from American capital markets.
The US securities watchdog said the new guidelines established a clear process of what information and documents would go into assessing whether a foreign company is in compliance with US securities law.
It will allow the Public Company Accounting Oversight Board’s (PCAOB), a non-profit entity that deals with accounting issues of public companies, to determine whether a delisting process needs to be triggered.
The framework will also help determine the effective date and duration of such determinations and circumstances under which the oversight board will reconfirm or change the findings.
“I believe it is critical that the commission and the PCAOB work together to ensure that the auditors of foreign companies accessing US capital markets play by the same rules,” SEC Chairman Gary Gensler said on Friday.
