Chinese tech firms face US ultimatum over issue of American accounting standards
Mar 26, 2021
Washington DC [US], March 26 : New York-listed Chinese tech firms could soon be forced to leave the US market after the country's Securities and Exchange Commission (SEC) started implementing a law to remove foreign firms that did not comply with local accounting standards, South China Morning Post reported.
This comes after the SEC, which regulates the US stock markets, amended the Holding Foreign Companies Accountable Act to remove from the US stock markets foreign firms that did not comply with local accounting standards.
"The SEC has adopted interim final amendments to implement congressionally mandated submission and disclosure requirements of the Holding Foreign Companies Accountable Act (HFCA Act)," the SEC said in a statement on Wednesday.
The amended rule comes as US-China relations have reached a new low over several disputes on issues concerning human rights and trade, among others.
The SEC said that it was "seeking public comment on these submission and disclosure requirements" within 90 days of the date of the enactment of the changes.
The HFCA Act would allow the SEC to kick foreign companies off US stock exchanges if they did not comply with the country's auditing standards. The law would also require alien firms to disclose any governmental affiliations.
Signed into law in December last year, the HFCA Act was primarily aimed at removing Chinese companies from US exchanges if they failed to comply with US auditing standards, Sputnik reported.
The law also requires firms to prove to the SEC they are not owned or controlled by an entity of a foreign government, and to name any board members with such links.
