US SEC Pushes to Delist Chinese Companies Ignoring Domestic Accounting Standards

Possibility of Trump Driving a Final Nail in the Economic Sector Before Leaving Office

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The U.S. Securities and Exchange Commission (SEC) is reportedly preparing measures to delist Chinese companies listed in the U.S. that do not undergo accounting audits based on U.S. standards. It is presumed that the Donald Trump administration is taking a 'finalizing' stance on existing policies in the economic sector as well.

The Wall Street Journal (WSJ) reported on the 17th (local time) that the SEC has set this policy and will disclose specific measures next month.

President Trump had instructed the SEC in June to prepare measures to protect American investors who suffer losses due to Chinese companies' violations of accounting regulations.

Chinese companies listed on the U.S. stock market are required, under a memorandum of understanding signed by the U.S. and China in 2013, to provide accounting audit materials from China's regulatory authority, the China Securities Regulatory Commission (CSRC).

However, the Chinese regulatory authority often refuses requests from U.S. regulators for materials, citing concerns over the leakage of Chinese companies' information. China also enacted a law this year prohibiting its companies from following foreign regulatory authorities' directives without government approval.

Accordingly, the SEC's position is to require Chinese companies to have their audit reports verified by private accounting firms that comply with U.S. accounting standards.

The SEC plans to delist Chinese companies from U.S. capital markets such as the New York Stock Exchange (NYSE) and Nasdaq if they do not comply with these regulations.

The WSJ predicted that it will take several months or more for the SEC to enforce these new regulations and there is also a possibility that the Joe Biden administration may change the SEC's plans.

This content was produced with the assistance of AI translation services.