Chinese companies could be delisted 'as early as 2024': SEC Chair

GARY GENSLER: We’re blessed in the US, again, with such robust and strong capital markets that between 1,000 and 1,500 foreign companies actually list their shares here in the US. It’s not just China companies, but a lot of Europeans, Asia and South American, African, Australian companies. It’s just from all around the globe.

But there’s some basic understandings that if you want to list in the US, you need to comply with our investor protection rules. And one of the key things that came out 20 years ago, one of the key things was that if you want to be issuing and raising money in the US that you have to be not only audited, that the company has to be audited, but the auditors have to be open to inspection, kind of simple idea. Audit the auditors.

And Paul Sarbanes, a Maryland senator who I had the honor to work with, Chair Sarbanes, passed that law 20 years ago, bipartisan, with Republicans on the Hill, with Mike Oxley, and with President Bush. 20 years later, 50 plus jurisdictions around the globe have allowed US entity called the Public Company Accounting Oversight Board to audit the auditors. But China has not. So Congress weighed in, again, two years ago, or a year and a half ago, and said no, that’s not right. And they put a clock that had to happen.

So where are we today? I think we’ve had some good discussions with our counterparts from China. The Public Company Accounting Oversight Board has had some good discussions. But it’s really up to the officials in China, if they allow the auditing firms in Beijing and Shanghai and elsewhere to be inspected and that their work papers are actually shared, and not with a lot of redactions, but actually shared, and their auditors actually allowed themselves to give interviews and testimony, like 50 other countries have done, then there’s a path forward. Otherwise, Congress has spoken. About 250 Chinese companies, and if this three-year clock, potentially as early as 2024, would have to suspend trading here.

Yahoo Finance Sauce

Any thoughts on these 250 firms, might be an opportunity similar to the Russian delisting in ETFs, etc.?

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