China modified a decadelong rule that restricted offshore-listed firms’ financial data sharing practice, potentially removing a key hurdle for U.S. regulators to gain full access to auditing reports of the majority of the 200-plus Chinese companies listed in New York.
The revised draft rules deleted the requirement that on-site inspections should be mainly conducted by Chinese regulatory agencies or rely on their inspection results, the China Securities Regulatory Commission said in a joint statement with other regulators Saturday. The CSRC will provide assistance during the process through a cross-border regulatory cooperation mechanism. Meanwhile, all companies listed directly or indirectly overseas will be responsible for properly managing confidential and sensitive information, and protecting national information security, according to the statement.
The amendments mark an unusual reversal by Beijing, potentially ending a decadeslong dispute that escalated when the U.S. set a 2024 deadline for kicking noncompliant businesses off the New York Stock Exchange and Nasdaq. The compromise would also show China’s willingness to balance national security concerns with the needs of investors and businesses at a time when its economy faces numerous challenges.
