China Relents, Allows Firms Listed In U.S. Bourses To Be Audited

China is extending an olive branch to the United States in a bid to prevent Chinese firms from being kicked off the US stock market, Laure He reported for CNN.

Photo Insert: The China Securities Regulatory Commission (CSRC) is the country's top securities watchdog.

The China Securities Regulatory Commission (CSRC), the country's top securities watchdog, proposed key revisions on Saturday, April 2, 2022, to a decade-old rule that forbids Chinese firms from sharing sensitive data and information with overseas regulators.

The amendment might allow US regulators to inspect auditing reports of Chinese companies listed in New York.

It could potentially end a long-standing audit dispute between the two countries that could see more than 200 Chinese firms removed from the New York Stock Exchange (NYSE) or Nasdaq.

CSRC said the existing rule, published in 2009, was outdated, and that it's "necessary to improve institutional arrangements" to cooperate with overseas regulators.

In the new draft rule, the regulator has struck out a requirement that examination of the financial papers of overseas-listed Chinese firms must be "mainly conducted by Chinese regulatory agencies."

Instead, it says that the inspections shall be "conducted through cross-border regulatory cooperation mechanism," and the CSRC will provide assistance during the process. The draft rule has been put to public consultation until April 17.

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