WASHINGTON, Dec 2 (Reuters) – Chinese language firms that listing on U.S. inventory exchanges should disclose whether or not they’re owned or managed by a authorities entity, and supply proof of their auditing inspections, the Securities and Alternate Fee (SEC) mentioned on Thursday.
The brand new guidelines implement a regulation handed by Congress in December 2020 that goals to make sure international firms listed in the US, particularly Chinese language firms, adjust to U.S. guidelines.
In contrast to many international locations, China has not allowed the SEC’s accounting physique, the Public Firm Accounting Oversight Board, to examine its auditors, which in flip certify the accounts of Chinese language firms listed in the US. Regulators fear that lack of oversight is placing U.S. buyers in danger.
At its core, “the finalized rule will enable buyers to simply determine registrants whose auditing corporations are situated in a international jurisdiction that the PCAOB can not fully examine. Furthermore, international issuers can be required to reveal the extent of international authorities possession in these entities,” mentioned an SEC official.
Reporting by Katanga Johnson in Washington; Modifying by Cynthia Osterman