Beijing is talking to U. S. regulators. The U. S. treasury on logistics to allow on-site audit inspections of Chinese companies listed in New York, according to others familiar with the matter, a sign of progress in talks to keep U. S. stock markets going. U. S. government open to issuers from Asia’s largest economy. .
Regulators on both sides are negotiating how to allow a team of inspectors from the Public Enterprise Accounting Oversight Board to stop in China so they can review the audit procedures and reports of most of the 261 publicly traded companies. United, the other people said, asking not to be named because the matter is private. The talks, aimed at preserving quotes and reviving new public offerings, include addressing issues such as quarantine requirements, the other people added.
The two countries have yet to succeed in a conclusive agreement on procedural controls, the resources said.
On-site inspections would boost the procedure to convince the U. S. UU. de that its inspectors will have complete the audit documents required by the law passed under the Trump administration. that threat will be kicked out of the New York Stock Exchange and nasdaq stock market unless China complies. SEC Chairman Gary Gensler noted that the law left little room for compromise.
Progress in a two-decade stagnation would demonstrate Beijing’s seriousness in boosting market confidence and balancing national security considerations with needs.
Chinese markets have tanked this year, with the benchmark CSI 300 index falling 20% as a strict COVID Zero policy and crackdown on personal corporations combine to undermine investor confidence. Concerns about potential cancellations have contributed to a 69% drop on the Nasdaq. Golden Dragon Index of Chinese stocks traded in the US since the indicator peaked in February 2021.
“We continue to meet and discuss with the government of the People’s Republic of China with the aim of reaching an agreement, but the hypothesis about a final agreement remains premature,” the PCAOB said in a statement. In the past he had said that any deal would be a “first deal. “step” and that the PCAOB would then investigate to make sure it was complied with.
The China Securities Regulatory Commission did not respond to a fax seeking comment, while the SEC declined to comment.
Dozens of countries allow U. S. audit inspections. In the U. S. , what gives U. S. officials the U. S. UU. la green courtesy to interview local accountants and review your work documentation. Mainland China and Hong Kong refused, bringing up privacy legislation and national security concerns.
The SEC adds corporations to a week’s provisional list that can be removed if the 2024 deadline imposed by Congress is missed. They now come with Baidu Inc. , Weibo Corp. , and Futu Holdings Ltd. The list is expected to eventually cover all Chinese stocks listed in the US. In the US, the largest of them, Alibaba Group Holding Ltd.
The Chinese government is willing to settle for removing from the list some state-owned enterprises and personal corporations that have sensitive knowledge, other people familiar with the matter in the past have said.
The CSRC is confident of reaching an agreement and talks to the PCAOB every two weeks about the dispute, Fang Xinghai, vice president of the Chinese regulator, said last week.
China also replaced a decade-long rule that limited how overseas-listed corporations account for the percentage of its monetary data. The draft regulations remove the requirement that on-site inspections must be conducted primarily through Chinese regulators or rely on the results of their inspections.
Earlier this month, the CSRC promised to provide assistance through a cross-border regulatory cooperation mechanism. All directly or indirectly indexed corporations will be to blame for the correct control of sensitive and sensitive data and the security coverage of national data, he said.
In accordance with the rules issued in 2009, written execution documents on land, the procedure for promoting actions abroad simply cannot be shared with foreign entities or persons. It was also prohibited to store, process or transmit execution documents on state secrets or national security in a non-confidential manner. pc systems
The CSRC said that in practice it is rare for corporations to wish to provide documents containing confidential and sensitive information. However, if the audit process is mandatory, they will have to download approvals in accordance with similar laws and regulations, the watchdog said.
The Chinese government is seeking to boost investor confidence after a series of crackdowns that have rattled markets. Promising greater political stability, China’s most sensible monetary regulator said last month it backed quotes, the outlook of which has been tarnished through a series of new regulations and confrontation with the United States.
China intensified scrutiny of quotes last year after the New York IPO of ride-sharing giant Didi Global Inc. , which took a stand despite regulatory concerns. In December, it imposed new restrictions on donations through corporations in sectors banned from foreign investment.
Tightening scrutiny prompted the SEC to suspend the IPOs of Chinese corporations last year until they revealed the dangers they pose to shareholders. Only a few Chinese corporations have registered in the US. The U. S. department of emergency restrictions followed additional restrictions on both sides.
According to a U. S. government report, 261 Chinese corporations were indexed in the U. S. U. S. as shares of American Depository, with a combined market capitalization of $1. 4 trillion as of March 31, 8 domestic state-owned enterprises.
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