China Securities Regulator Denies Report On Delisting Survival Plan
The China Securities Regulatory Authority banner at the regulator’s headquarters on November 16, 2020 in Beijing.
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BEIJING — China’s securities regulator told CNBC in a statement that it had not considered a plan for a three-tiered system to help Chinese companies avoid a US delist.
The Financial Times, citing sources, reported that China is preparing a system to separate Chinese companies listed in the US into three groups based on their level of data sensitivity. The report said the system would help some Chinese companies comply with US demands to be able to examine audit papers.
The China Securities Regulatory Commission added that companies must comply with data security and listing rules, regardless of whether they go public on the mainland or abroad. The regulator said other information about ongoing discussions with US regulators should come from official announcements.
Regulators in Washington and Beijing are working to resolve an audit dispute that has threatened US-listed Chinese companies with delisting.
Since March, the US Securities and Exchange Commission has identified certain US-listed Chinese stocks that do not comply with the Foreign Company Accountability Act. Enacted in 2020, the law would allow the US Securities and Exchange Commission to delist Chinese companies from US exchanges if US regulators have not been able to review the company’s audits for three consecutive years.