The U.S. Securities and Exchange Commission (SEC) on Wednesday issued new rules that will remove any listed company in the United States from the trading market if it does not comply with the relevant accounting audit system; and the company’s ownership by a foreign government or the board of directors of Chinese Communist Party officials must also be reported, Reuters reported on March 24.
The SEC noted in a statement that the new rules will require listed companies to provide evidence that their ownership or operation is not controlled by a foreign government organization and must identify any Chinese Communist Party officials on their boards of directors.
Under the Foreign Company Accountability Act, signed into law by former President Trump last December, any Chinese company listed in the U.S. that fails to comply with U.S. accounting standards for three consecutive years will be withdrawn from the U.S. stock exchange. The law, which took effect within 90 days, requires the U.S. Securities and Exchange Commission to quickly make provisions for information filings by listed companies.
The above move by the U.S. securities regulator comes at a Time of escalating tensions between the U.S. and China and bipartisan support for implementing a tough policy toward China, the report said.
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