About 200 US-traded Chinese companies are at risk of delisting if the accounting body overseen by the US Securities and Exchange Commission cannot complete audit inspections and investigations by early November, an SEC official said.
This timetable allows the US Public Company Accounting Oversight Board (PCAOB) time to assess if a company complies with its audit requirements by a year-end deadline, YJ Fischer, director at the SEC’s office of international affairs, said in a speech on Tuesday.
US-listed Chinese companies including Alibaba, Yum China and JD.com could be barred from trading on US stock exchanges as soon as early 2023 if they are deemed non-compliant with regulations.
“We are now at a critical juncture in the effort to resolve these audit access issues,” Ms Fischer said.
“About $1.7 trillion in securities of China-based issuers are listed on exchanges in the US. These securities could face trading prohibitions in as little as two years, which means the issuers of those securities will no longer have access to US capital markets because they are not in compliance with regulatory requirements.”
In December, the US securities regulator made it compulsory for Chinese companies trading on US stock exchanges to disclose if they are owned or controlled by a government entity and provide evidence of their auditing inspections.
“PCAOB-registered public accounting firms must provide the PCAOB with access to their audit work papers and any claim that audit work papers cannot be produced because they contain national security materials is questionable at best,” Ms Fischer said.
The SEC rule, which implements a law passed by Congress in 2020, seeks to rectify the decade-long problem of China’s refusal to let inspectors from the PCAOB to review audits of companies such as Alibaba, Baidu and Weibo.
The SEC deems non-compliance of Chinese companies a threat to US investors.
In August, the market regulator started issuing new disclosure requirements to Chinese companies seeking to list in New York as part of a push to boost investor awareness of the risks involved.
The SEC issued Chinese companies detailed instructions about greater disclosure of their use of offshore vehicles – known as variable interest entities, or VIEs – for initial public offerings, the implications for investors and the risk that Chinese authorities will interfere with company operations.
We are now at a critical juncture in the effort to resolve these audit access issues
YJ Fischer,
director, SEC's office of international affairs
There have been several rounds of talks between Chinese and US officials but the issue of access to accounts has yet to be resolved.
“Although there have been ongoing and productive discussions between US and Chinese authorities regarding audit inspections and investigations, significant issues remain and time is quickly running out,” Ms Fischer said.
Even if US and Chinese authorities reach an agreement in the near future to commence PCAOB audit inspections and investigations in China and Hong Kong, it will “only be the start towards satisfying the PCAOB’s statutory mandate”, she said.
A Chinese company or the relevant Chinese authorities should voluntarily delist a company if they deem the accounting information “too sensitive to comply” with PCAOB requirements.
However, Chinese authorities should allow other companies and auditors to comply fully with the PCAOB inspection and investigative processes, “allowing the remainder of China-based issuers to avoid potential trading prohibitions in the US”, Ms Fischer said.
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The five pillars of Islam
Du Plessis plans his retirement
South Africa captain Faf du Plessis said on Friday the Twenty20 World Cup in Australia in two years' time will be his last.
Du Plessis, 34, who has led his country in two World T20 campaigns, in 2014 and 2016, is keen to play a third but will then step aside.
"The T20 World Cup in 2020 is something I'm really looking forward to. I think right now that will probably be the last tournament for me," he said in Brisbane ahead of a one-off T20 against Australia on Saturday.
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MOUNTAINHEAD REVIEW
Starring: Ramy Youssef, Steve Carell, Jason Schwartzman
Director: Jesse Armstrong
Rating: 3.5/5
Killing of Qassem Suleimani
Other IPL batting records
Most sixes: 292 – Chris Gayle
Most fours: 491 – Gautam Gambhir
Highest individual score: 175 not out – Chris Gayle (for Royal Challengers Bangalore against Pune Warriors in 2013)
Highest strike-rate: 177.29 – Andre Russell
Highest strike-rate in an innings: 422.22 – Chris Morris (for Delhi Daredevils against Rising Pune Supergiant in 2017)
Highest average: 52.16 – Vijay Shankar
Most centuries: 6 – Chris Gayle
Most fifties: 36 – Gautam Gambhir
Fastest hundred (balls faced): 30 – Chris Gayle (for Royal Challengers Bangalore against Pune Warriors in 2013)
Fastest fifty (balls faced): 14 – Lokesh Rahul (for Kings XI Punjab against Delhi Daredevils in 2018)
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Farage on Muslim Brotherhood
Nigel Farage told Reform's annual conference that the party will proscribe the Muslim Brotherhood if he becomes Prime Minister.
"We will stop dangerous organisations with links to terrorism operating in our country," he said. "Quite why we've been so gutless about this – both Labour and Conservative – I don't know.
“All across the Middle East, countries have banned and proscribed the Muslim Brotherhood as a dangerous organisation. We will do the very same.”
It is 10 years since a ground-breaking report into the Muslim Brotherhood by Sir John Jenkins.
Among the former diplomat's findings was an assessment that “the use of extreme violence in the pursuit of the perfect Islamic society” has “never been institutionally disowned” by the movement.
The prime minister at the time, David Cameron, who commissioned the report, said membership or association with the Muslim Brotherhood was a "possible indicator of extremism" but it would not be banned.
The specs: 2019 Aston Martin DBS Superleggera
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Mohammed bin Zayed Majlis
KILLING OF QASSEM SULEIMANI
Killing of Qassem Suleimani
UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
Votes
Total votes: 1.8 million
Ashraf Ghani: 923,592 votes
Abdullah Abdullah: 720,841 votes
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
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Infiniti QX80 specs
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Power: 450hp
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Mohammed bin Zayed Majlis
Brief scores:
Toss: Sindhis, elected to field first
Kerala Knights 103-7 (10 ov)
Parnell 59 not out; Tambe 5-15
Sindhis 104-1 (7.4 ov)
Watson 50 not out, Devcich 49
The specs
Engine: 2.0-litre 4cyl turbo
Power: 261hp at 5,500rpm
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The years Ramadan fell in May
Opening weekend Premier League fixtures
Weekend of August 10-13
Arsenal v Manchester City
Bournemouth v Cardiff City
Fulham v Crystal Palace
Huddersfield Town v Chelsea
Liverpool v West Ham United
Manchester United v Leicester City
Newcastle United v Tottenham Hotspur
Southampton v Burnley
Watford v Brighton & Hove Albion
Wolverhampton Wanderers v Everton
Mohammed bin Zayed Majlis
Killing of Qassem Suleimani
Evacuations to France hit by controversy
- Over 500 Gazans have been evacuated to France since November 2023
- Evacuations were paused after a student already in France posted anti-Semitic content and was subsequently expelled to Qatar
- The Foreign Ministry launched a review to determine how authorities failed to detect the posts before her entry
- Artists and researchers fall under a programme called Pause that began in 2017
- It has benefited more than 700 people from 44 countries, including Syria, Turkey, Iran, and Sudan
- Since the start of the Gaza war, it has also included 45 Gazan beneficiaries
- Unlike students, they are allowed to bring their families to France
Killing of Qassem Suleimani
