China regulator denies report on data strategy to avoid U.S. delistings

Chinese language and U.S. flags flutter outdoors an organization constructing in Shanghai, China November 16, 2021. REUTERS/Aly Music/File Photograph

HONG KONG, July 25 (Reuters) – China’s securities regulator on Monday denied a media report that stated Beijing deliberate to type U.S.-listed Chinese language firms based mostly on the sensitivity of the information they maintain in an try and cease U.S. regulators from delisting a whole lot of corporations.

The three-tier system goals to carry Chinese language firms into compliance with U.S. guidelines that may require public firms to let regulators examine their audit information, the Monetary Occasions reported on Sunday, citing folks with data of the matter.

The China Securities Regulatory Fee (CSRC) “has not studied” a three-tier classification of firms, it stated in a press release.

“Enterprises are required to adjust to related nationwide information info administration legal guidelines, guidelines and regulatory necessities of the place of itemizing, no matter whether or not they’re listed domestically or abroad,” the regulator stated.

Washington has lengthy demanded full entry to the books of U.S.-listed Chinese language firms, however Beijing, citing nationwide safety issues, bars overseas inspection of working papers from native accounting corporations.

Greater than 270 Chinese language firms listed in New York have been recognized as being at delisting threat beneath the Holding Overseas Firms Accountable Act (HFCAA) handed late final 12 months.

The rule provides Chinese language firms till early 2024 to adjust to auditing necessities, although the U.S. Congress is weighing bipartisan laws that might speed up the deadline to 2023.

China has claimed either side are dedicated to succeed in a deal to unravel the audit dispute. learn extra

However the U.S. aspect has been extra reserved on the outlook.

Earlier this month, Securities and Alternate Fee Chairman Gary Gensler stated he was “not notably assured” {that a} deal could possibly be made, based on media stories.

In early April, China moved to resolve a dispute over cross-border audit inspections by proposing scrapping necessities that on-site inspection of overseas-listed Chinese language firms be carried out primarily by Chinese language regulators. learn extra

Reporting by Martin Pollard and Xie Yu; Modifying by Sumeet Chatterjee and Stephen Coates

: .