As China seeks to guarantee its publicly traded companies stay listed in New York, Beijing regulators are considering a plan that would permit their U.S.-based counterparts to examine audits of some Chinese firms that do not collect sensitive data, sources told Reuters.
Earlier this month, the China Securities Regulatory Commission (CSRC), the People’s Republic of China’s central regulator of the securities industry, summoned leaders from the nation’s top internet companies, including Baidu, a popular search engine, JD.com and Alibaba, the giant eCommerce companies.
The firms were told to prepare audit documents for 2021 while keeping in mind U.S. regulators’ requests for more disclosure, the unnamed sources said. If companies are uncertain about anything during the auditing and communications procedure with U.S. regulators, they have been directed to seek Chinese regulators’ advice.
CSRC, Alibaba, Baidu and JD.com did not respond to a request for comment.
If the report is accurate, it represents the latest move by China’s regulatory agencies that demonstrates Beijing’s willingness to end the long-running China-U.S. audit stalemate.
The deadlock has put hundreds of billions of dollars of U.S. investments in Chinese companies at risk.
U.S. regulators are close to removing Chinese companies from American stock exchanges, if audit records remain unavailable for inspection.
PYMNTS has reported the U.S. Securities Exchange Commission (SEC) is moving forward with a plan that could boot Chinese companies from U.S. stock exchanges.
Read more: SEC Ready For Vote On Plan To Delist Chinese Firms
The proposed regulation would effectively delist companies for not following U.S. auditing rules. The issue has been fast-tracked and focuses on China’s refusal to allow U.S. inspectors from the Public Company Accounting Oversight Board (PCAOB) to review audits from Chinese firms trading in American markets.
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