Reporters: The U.S. House of Representatives has passed the Holding Foreign Companies Accountable Act (hereinafter referred to as the proposed Act) , which may prohibit listing of securities in the U.S. markets for foreign issuers whose audit firms do not satisfy the inspection requirements of the U.S. Public Company Accounting Oversight Board(PCAOB) for 3 consecutive years, and impose additional disclosure requirements for these foreign issuers. What’s the CSRC’ comment on this matter?
CSRC officials: We have taken note of this development. The proposed Act is to impose additional disclosure requirements on foreign issuers, requiring them to establish that they are not owned or controlled by foreign government entities, to disclose the names of Chinese Communist Party members who sit on the board of directors, and whether the articles of incorporation of the issuer contain any reference to the Charter of Chinese Communist Party. These provisions are obviously discriminatory and have totally deviated from professional considerations of securities regulation. The CSRC strongly opposes such acts of politicizing securities regulation. Forcing Chinese companies de-list from the U.S. markets by imposing such provisions will substantially damage the interests of American investors and global investors as well.
It is an issue of cross-border regulatory cooperation that for the time being the U.S. PCAOB is unable to inspect the Chinese audit firms who provide audit services for Chinese companies listed in the U. S. markets. This issue shall be resolved by enhancing bilateral regulatory cooperation. The CSRC has always been open for bilateral consultations and cooperation to address relevant concerns of the U.S. side. We look forward to meaningful discussions with the PCAOB on the details of our joint inspection proposal in line with the principle of mutual respect and resolving disagreements via dialogue.Such mutual efforts will be essential for enhancing bilateral audit oversight cooperation and for creating sound regulatory environment for cross-border listings.
