China’s Securities Regulator Urges US Not To Politicize

China’s top securities regulator on Sunday, May 24, made a stand against the US legislation to politicize securities supervision, holding the bill is directed against China rather than out of professional considerations.

The US Senate passed legislation last week that aims to prevent some Chinese companies from listing their shares on US exchanges unless they follow standards for US audits and regulations, according to Reuters.

The Holding Foreign Companies Accountable Act requires certain issuers of securities to establish that they are not owned or controlled by a foreign government and bars securities of any company from being listed on any US securities exchange if it has failed to comply with the US Public Company Accounting Oversight Board’s audits for three consecutive years.

“The bill completely disregards long-term efforts by Chinese and US regulators to beef up audit supervision cooperation. China has always given high priority to bilateral cooperation over capital market audit and supervision,” stated the China Securities Regulatory Commission (CSRC).

In 2017, the two sides conducted a pilot inspection of one PCAOB-registered (Public Company Accounting Oversight Board) Chinese accounting firm. In 2019, the CSRC provided specific proposals for several times to PCAOB on conducting a joint inspection of Chinese accounting firms.

“We look forward to a positive response from the US regulatory agencies, and call on both parties to expedite the joint inspection of accounting firms through equal and friendly consultations and drawing on common international practices of audit supervisory cooperation.”

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