Shares of multiple Chinese companies are trading lower Thursday following reports the U.S. Securities and Exchange Commision has identified multiple US-listed ADRs as having not adhered to the Holding Foreign Companies Accountable act (HFCAA).
ADRs are securities that represent shares of companies outside of the U.S., but trade on U.S. exchanges. HFCAA was passed in 2020 and allows the SEC to ban and delist companies from U.S. exchanges if regulators are unable to review company audits for three consecutive years.
The companies under scrutiny reportedly include Yum China Holdings Inc (NYSE:YUMC), BeiGene Ltd (NASDAQ:BGNE), Zai Lab Ltd (NASDAQ:ZLAB), ACM Research Inc (NASDAQ:ACMR) and HUTCHMED Ltd (NASDAQ:HCM).
However, the decline in Chinese stocks is widespread across the board. Alibaba Group Holding Ltd (NYSE:BABA) was down 8.31%, Baidu Inc (NASDAQ:BIDU) was down 6.17% and Pinduoduo Inc (NASDAQ:PDD) was down 17.7% at publication time.
Other catalysts for Chinese market weakness include JD.com Inc (NASDAQ:JD) weakness following earnings and Russia-Ukraine escalation.
Related Link: Why JD.com Shares Are Falling Today
Photo: viarami from Pixabay.
