London Daily

Focus on the big picture.
Thursday, Sep 18, 2025

US securities regulator pushes plan that could delist Chinese firms

US securities regulator pushes plan that could delist Chinese firms

The Securities and Exchange Commission intends to propose a regulation that would lead to the delisting of companies for not complying with US auditing rules.

The US securities regulator is pushing ahead with a plan that would require US-listed Chinese companies to use auditors overseen by the US or face delisting from US stock exchanges.

The proposal by the Securities and Exchange Commission (SEC) is likely to be open to public comment in December, according to The Wall Street Journal.

The regulation is part of a concerted effort to get tough on China as the Trump administration winds down in the coming weeks to mark its legacy on China issues and make certain policies difficult for the incoming Biden administration to unwind.

This is the second move since the November 3 presidential election by the Trump administration to cut Chinese companies off of US capital markets. Last week, Trump signed an executive order prohibiting Americans from investing in Chinese firms that are deemed linked to the Chinese military.

Agency officials have been working to draft the proposal since August, urged by the President’s Working Group on Financial Markets – a group that includes the SEC Chairman Jay Clayton and Treasury Secretary Steven Mnuchin.

To push the regulation forward now, however, is unusual because agencies typically stop issuing major new policies after a presidential election.

The new regulation would force Chinese companies that have shares traded on American stock exchanges such as the New York Stock Exchange and Nasdaq to comply with auditing regulations like any other listed company.

The regulation will depend on the exchanges to execute it by delisting companies that fail to maintain compliance with the rules and bar companies from going public.

SEC chairman Jay Clayton, who announced plans to step down by the end of the year, will be gone before any regulation is finalised. That would leave completing it to an SEC chief picked by President-elect Joe Biden.

The NYSE declined to comment. The SEC and the Nasdaq did not immediately respond to requests seeking comment.

US auditing supervisor, the Public Company Accounting Oversight Board, has been battling against China for decades over its resistance to hand over publicly-traded companies’ audits for inspection. Beijing has refused to comply citing state secret laws.

The White House and Congress have ratcheted up efforts to crack down on the disparity in treatment of Chinese companies traded in the US, saying US investors are exposed to unknown and outsize risks because of the lack of transparency.

More than 210 Chinese firms with a combined market capitalisation of about US$2.2 trillion are listed on major US stock exchanges as of October, according to the most recent congressional report by the US-China Economic and Security Review Commission.

“The People’s Republic of China (PRC) is increasingly exploiting United States capital to resource and to enable the development and modernisation of its military, intelligence, and other security apparatuses,” said US President Donald Trump in the executive order last week.

US regulator said in 2018 that among 224 listed companies on American stock exchanges that it has problem inspecting, 213 were Chinese companies.
In April, Luckin Coffee was caught in the midst of an accounting scandal. Less than a year after the Chinese rival to Starbucks went public on the Nasdaq, it was found to have fabricated as much as US$310 million in sales.

In May, the Senate unanimously passed legislation – the Holding Foreign Companies Accountable Act – that would delist companies for failing to comply with the auditing rules for three straight years.

“All the rest of us want is for China to play by the rules,” Senator John Kennedy, the Louisiana Republican who wrote the pending legislation, said earlier in the year.


The new regulation would force Chinese companies that have shares traded on American stock exchanges such as the New York Stock Exchange and Nasdaq to comply with auditing regulations like any other listed company.


The President’s Working Group report that is driving SEC action recommended that exchanges establish enhanced standards to prevent the listing of companies that do not comply with US rules.

The report said the rules should not take effect until January 2022 to prevent market disruptions.

The Chinese securities regulator said in May that the US was politicising securities regulations, saying China had assisted in an investigation of a Chinese accounting firm in 2017.

The SEC and the stock exchanges have acknowledged the long-standing problems with publicly traded Chinese companies, but they cautioned that cracking down on Chinese listings could lead to an exodus of these firms that accounted for hefty listings fees and revenue.

They have been advocating for a market-driven approach instead that could include heavier oversight of US arms of auditing firms such as Deloitte, PwC, Ernst & Young and KPMG, requiring them to provide collateral for audit failures of their Chinese affiliates in the form of financial guarantees.

Newsletter

Related Articles

0:00
0:00
Close
Macron and his wife to provide 'scientific photographic evidence' that she is a real woman
US Tech Giants Pledge Billions to UK AI Infrastructure Following Starmer's Call
Saudi Arabia cracks down on music ‘lounges’ after conservative backlash
DeepMind and OpenAI Achieve Gold at ‘Coding Olympics’ in AI Milestone
SEC Allows Public Companies to Block Investors from Class-Action Lawsuits
Saudi Arabia Signs ‘Strategic Mutual Defence’ Pact with Pakistan, Marking First Arab State to Gain Indirect Access to Nuclear Strike Capabilities in the Region
Federal Reserve Cuts Rates by Quarter Point and Signals More to Come
Effective and Impressive Generation Z Protest: Images from the Riots in Nepal
European manufacturers against ban on polluting cars: "The industry may collapse"
Sam Altman sells the 'Wedding Estate' in Hawaii for 49 million dollars
Trump: Cancel quarterly company reports and settle for reporting once every six months
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
US Launches New Pilot Program to Accelerate eVTOL Air Taxi Deployment
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
Hong Kong Industry Group Calls for HK$20 Billion Support Fund to Ease Property Market Stress
Joe Biden’s Post-Presidency Speaking Fees Face Weak Demand amid Corporate Reluctance
Charlie Kirk's murder will break the left's hateful cancel tactics
Kash Patel erupts at ‘buffoon’ Sen. Adam Schiff over Russiagate: ‘You are the biggest fraud’
Homeland Security says Emmy speech ‘fanning the flames of hatred’ after Einbinder’s ‘F— ICE’ remark
Charlie Kirk’s Alleged Assassin Tyler Robinson Faces Death Penalty as Charges Formally Announced
Actor, director, environmentalist Robert Redford dies at 89
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
JD Vance Says There Is “No Unity” with Those Who Celebrate Charlie Kirk’s Killing, and he is right!
Trump sues the 'New York Times' for an astronomical sum of 15 billion dollars
Florida Hospital Welcomes Its Largest-Ever Baby: Annan, Nearly Fourteen Pounds at Birth
U.S. and Britain Poised to Finalize Over $10 Billion in High-Tech, Nuclear and Defense Deals During Trump State Visit
China Finds Nvidia Violated Antitrust Laws in Mellanox Deal, Deepens Trade Tensions with US
US Air Force Begins Modifications on Qatar-Donated Jet Amid Plans to Use It as Air Force One
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
Elon Musk Retakes Lead as World’s Richest After Brief Ellison Surge
U.S. and China Agree on Framework to Shift TikTok to American Ownership
London Daily Podcast: London Massive Pro Democracy Rally, Musk Support, UK Economic Data and Premier League Results Mark Eventful Weekend
This Week in AI: Meta’s Superintelligence Push, xAI’s Ten Billion-Dollar Raise, Genesis AI’s Robotics Ambitions, Microsoft Restructuring, Amazon’s Million-Robot Milestone, and Google’s AlphaGenome Update
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Musk calls for new UK government at huge pro-democracy rally in London, but Britons have been brainwashed to obey instead of fighting for their human rights
Elon Musk responds to post calling for the murder of Erika Kirk, widow of Charlie Kirk: 'Either we fight back or they will kill us'
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
USA: Office Depot Employees Refused to Print Poster in Memory of Charlie Kirk – and Were Fired
Proposed U.S. Bill Would Allow Civil Suits Against Judges Who Release Repeat Violent Offenders
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
French Debt Downgrade Piles Pressure on Macron’s New Prime Minister
US and UK Near Tech, Nuclear and Whisky Deals Ahead of Trump Trip
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
Anesthesiologist Left Operation Mid-Surgery to Have Sex with Nurse
×