Congress And Nasdaq Propose Rules That May Result In Delisting Of Chinese Companies – Corporate/Commercial Law – United States

Congress and The Nasdaq Stock Market have both proposed rules that may result in the delisting of Chinese companies. On May 20, 2020, the Senate passed by unanimous consent S. 945, the Holding Foreign Companies Accountable Act, which would prohibit securities of a company from being listed on any U.S. securities exchange or traded “over-the-counter” if its auditor has not been subject to Public Company Accounting Oversight Board (PCAOB) oversight for three years. Federal securities laws and Nasdaq rules require that issuers’ financial statements be audited by an independent public accountant subject to oversight by the PCAOB. However, the PCAOB is currently prevented from inspecting the audit work and practices of PCAOB-registered auditors in China and Hong Kong (to the extent their audit clients have operations in mainland China) due to prohibitions imposed by the Chinese government.

Congress And Nasdaq Propose Rules That May Result In Delisting Of Chinese Companies – Corporate/Commercial Law – United States

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