Recent congress action passed the “Foreign Company Accountability Act”, which requires foreign companies that do not meet their inspection requirements to report to the Public Company Accounting Oversight Board (PCAOB). The company made additional disclosure requirements if the accounting firm is unable to meet its financial targets for three consecutive years. The accountants were forbidden from trading theor securities.
On December 4, the head of the relevant department of the China Securities Regulatory Commission stated that the China Securities Regulatory Commission took note of this situation. Judging from the content of the bill’s additional disclosure requirements for foreign issuers, including proving they are not owned or controlled by foreign governments, disclosing the names of Communist Party officials on the board of directors and whether the Party Constitution is written into the company’s articles of association, are discriminatory.
Are not based on professional considerations of securities supervision, and the China Securities Regulatory Commission firmly opposes this practice of politicising securities supervision. Using these regulations to force Chinese companies to delist from the U.S. stock market will cause severe damage to the interests of American investors and even global investors.
The person in charge of the above-mentioned relevant departments stated that the US regulatory agency could not inspect Chinese accounting firms that provide audit services for Chinese companies listed in the US. This act is an issue of cross-border regulatory cooperation, which should be directed by strengthening bilateral regulatory collaboration. China has always maintained an open attitude towards resolving US concerns through dialogue and collaboration.
“We expect that the regulatory agencies of both sides will conduct consultations on specific plans based on:
1.the principle of mutual respect, resolve differences through dialogue.
2. and earnestly promote China-US audit regulatory cooperation.
3. jointly create a good regulatory environment for cross-border listed companies.”