The US Securities and Exchange Commission added more than 80 firms to its list of entities facing possible expulsion from American exchanges, which include China’s JD.com, Pinduoduo, Bilibili, and NetEase.
The SEC on Wednesday (May 4) expanded the list, consisting of US-listed Chinese entities, on a provisional lineup under a 2020 law known as The Holding Foreign Companies Accountable Act.
The act, signed into a law by then-President Donald Trump, aims to remove foreign-jurisdiction companies from US bourses if they fail to comply with American auditing standards for three years in a row.
Other large Chinese companies that were added to the SEC’s list were JinkoSolar Holding, NIO and China Petroleum & Chemical, among others.Sources had told Reuters last month Chinese regulators had asked some of the country’s US-listed firms, including Alibaba, Baidu, and JD.com, to prepare more audit disclosures.
China had also proposed in early-April to revise confidentiality rules on offshore listings, a move sought to remove a legal hurdle to Sino-US co-operation on audit oversight and put the onus on Chinese firms to protect state secretes.
The development was after a US watchdog had said in March it continued to engage with Chinese regulators about getting access to their auditors’ records, but it was unclear if the Chinese government would grant the access required by a new US listing law.