WASHINGTON (Pakistan Point News / Sputnik - 03rd December, 2021) Foreign firms that are publicly-traded in the United States, including those from China, may be delisted under amended rules if their auditors do not comply with requests for information from US regulators, the Securities and Exchange Commission said on Thursday.
"If you want to issue public securities in the US, the firms that audit your books have to be subject to inspection by the PCAOB," SEC official Gary Gensler said in a statement, referring to the Public Company Accounting Oversight board. "This final rule furthers the mandate that Congress laid out and gets to the heart of the SEC's mission to protect investors."
The so-called Holding Foreign Companies Accountable Act was originally passed in 2020 after Chinese regulators repeatedly denied requests from the PCAOB to oversee the audits of Chinese firms that list and trade in the United States.
The SEC on Thursday said it has finalized amendments to the act to enhance its enforcement and allow the commission to delist firms that do not comply.
"The Commission and the PCAOB will continue to work together to ensure that the auditors of foreign companies accessing US capital markets play by our rules," Gensler said. "We hope foreign governments will, working with the PCAOB, take action to make that possible."
The SEC could prohibit about 270 Chinese companies from trading on US exchanges by 2024 if the companies do not allow inspections of their auditors, Mr. Gensler said in September in an op-ed in The Wall Street Journal.