Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Trump team outlines crackdown on US-listed Chinese groups

Trump team outlines crackdown on US-listed Chinese groups

Proposal recommends delisting companies that do not meet American accounting standards
The Trump administration has issued its recommendations to ban Chinese companies that do not comply with US accounting standards from listing on American stock exchanges.

The proposals - announced by a working group that included Steven Mnuchin, the Treasury secretary, and Jay Clayton, the chairman of the Securities and Exchange Commission -would force Chinese companies to delist from US stock exchanges unless regulators get access to their audits.

President Donald Trump in June gave his team 60 days to come up with the recommendations, and their release on Thursday marks another point of growing friction between the US and China, as relations between the countries plummet to their lowest point in decades.

The measures, which are subject to a lengthy rulemaking process before going into effect, would force the delisting of Chinese companies audited by firms whose work cannot be reviewed by the US Public Company Accounting Oversight Board because of Chinese government restrictions.

The PCAOB has for years been unable to review audits of China-based companies that are listed on US exchanges. The Chinese government prohibits the US regulator from inspecting auditing firms in the country and bans sharing internal audit documents.

The Trump administration recommendations envision an alternative to delisting in which the companies could hire a co-auditor outside of China, potentially a US-based entity within the same auditor group, thereby allowing the PCAOB another means to review the audit.

The proposal recommends delisting companies that fail to comply with either requirement by January 1, 2022, and a ban on new listings that did not comply, which would kick in immediately.

“If they come into compliance there would be very little impact,” said a senior SEC official. “With zero compliance, I think you’d have a fairly significant impact.”

The SEC must engage in a rulemaking process before the proposals can come into force. It is unclear how quickly it could do so.

The commission would first need to formally draft the proposals before issuing them for a period of public comment that could take up to two months. Any responses would then need to be assessed and potentially incorporated before being finalised, making it very unlikely that the start of implementation could occur before the US presidential election in November.

If they did come into force, they would put significant responsibility on possible co-auditors based outside of China.

“Our system puts legal responsibility and significant financial consequences on auditors who sign an audit but don’t do an adequate one,” the SEC official said.

The move marks the latest effort by Mr Trump to take a tougher stance on China over everything from trade and technology to ensuring that US investors are not funding Chinese companies that Washington views as a security threat.

In recent months, Mr Trump has expanded a crackdown on China by taking more actions to reduce the exposure of investors to Chinese companies that the US believes are helping Beijing threaten the US. In May, the Federal Retirement Thrift Investment Board, which manages almost $600bn in pension funds for US workers, abandoned a plan that would have increased its investments in China following White House opposition.

The proposal also recommends enhanced disclosure requirements for China-based companies and funds exposed to China-based groups, requiring more due diligence on the behalf of index providers, and guidance for investment advisers.

China’s Ministry of Foreign Affairs said on Friday it required its companies to comply with the laws and regulations of the locations in which they were listed.

“Some US monitoring authorities are failing to comply with their obligations,” it said. “What they are doing is political manipulation. They are trying to force Chinese companies to delist from the US market. It will harm US investors' interests.”
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Vatican hosts first Catholic LGBTQ pilgrimage
Apple Unveils iPhone 17 Series, iPhone Air, Apple Watch 11 and More at 'Awe Dropping' Event
France joins Eurozone’s ‘periphery’ as turmoil deepens, say investors
France Faces New Political Crisis, again, as Prime Minister Bayrou Pushed Out
Nayib Bukele Points Out Belgian Hypocrisy as Brussels Considers Sending Army into the Streets
France, at an Impasse, Heads Toward Another Government Collapse
The Country That Got Too Rich? Public Spending Dominates Norway Election
EU Proposes Phasing Out Russian Oil and Gas by End of 2027 to End Energy Dependence
More Than 150,000 Followers for a Fictional Character: The New Influencers Are AI Creations
EU Prepares for War
Trump Threatens Retaliatory Tariffs After EU Imposes €2.95 Billion Fine on Google
Tesla Board Proposes Unprecedented One-Trillion-Dollar Performance Package for Elon Musk
Gold Could Reach Nearly $5,000 if Fed Independence Is Undermined, Goldman Sachs Warns
Uruguay, Colombia and Paraguay Secure Places at 2026 World Cup
Trump Administration Advances Plans to Rebrand Pentagon as Department of War Instead of the Fake Term Department of Defense
Big Tech Executives Laud Trump at White House Dinner, Unveil Massive U.S. Investments
Tether Expands into Gold Sector with Profit-Driven Diversification
‘Looks Like a Wig’: Online Users Express Concern Over Kate Middleton
Florida’s Vaccine Revolution: DeSantis Declares War on Mandates
Trump’s New War – and the ‘Drug Tyrant’ Fearing Invasion: ‘1,200 Missiles Aimed at Us’
"The Situation Has Never Been This Bad": The Fall of PepsiCo
At the Parade in China: Laser Weapons, 'Eagle Strike,' and a Missile Capable of 'Striking Anywhere in the World'
The Fashion Designer Who Became an Italian Symbol: Giorgio Armani Has Died at 91
Putin Celebrates ‘Unprecedentedly High’ Ties with China as Gazprom Seals Power of Siberia-2 Deal
China Unveils New Weapons in Grand Military Parade as Xi Hosts Putin and Kim
Rapper Cardi B Cleared of Liability in Los Angeles Civil Assault Trial
Google Avoids Break-Up in U.S. Antitrust Case as Stocks Rise
Couple celebrates 80th wedding anniversary at assisted living facility in Lancaster
Information Warfare in the Age of AI: How Language Models Become Targets and Tools
The White House on LinkedIn Has Changed Their Profile Picture to Donald Trump
"Insulted the Prophet Muhammad": Woman Burned Alive by Angry Mob in Niger State, Nigeria
Trump Responds to Death Rumors – Announces 'Missile City'
Druzhba Pipeline Incident Sparks Geopolitical Tensions
Cost of Opposition Leader Péter Magyar's Economic Plan Revealed
Germany in Turmoil: Ukrainian Teenage Girl Pushed to Death by Illegal Iraqi Migrant
United Krack down on human rights: Graham Linehan Arrested at Heathrow Over Three X Posts, Hospitalised, Released on Bail with Posting Ban
Asian and Middle Eastern Investors Avoid US Markets
Ray Dalio Warns of US Shift to Autocracy
Eurozone Inflation Rises to 2.1% in August
Russia and China Sign New Gas Pipeline Deal
Von der Leyen's Plane Hit by Suspected Russian GPS Interference in an Incident Believed to Be Caused by Russia or by Pro-Peace or by Anti-Corruption European Activists
China's Robotics Industry Fuels Export Surge
Suntory Chairman Resigns After Police Probe
Gold Price Hits New All-Time Record
UK Fintechs Explore Buying US Banks
Greece Suspends 5% of Schools as Birth Rate Drops
Apollo to Launch $5 Billion Sports Investment Vehicle
Bolsonaro Trial Nears Close Amid US-Brazil Tension
European Banks Push for Lower Cross-Border Barriers
Poland's Offshore Wind Sector Attracts Investors
×