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US-China talks on delistings advance with Hong Kong inspections

The conversations, which remain ongoing, could result in a significant advance in a years-long standoff over the inspections, which are required for all firms that trade in the US.

August 26, 2022 / 02:48 PM IST
The Texas state flag is flown at half-mast, in honor of the of the victims of the Uvalde school shooting, outside the New York Stock Exchange (NYSE) in New York, US, on Tuesday, May 31, 2022. The S&P 500 defied bear market status just over a week ago and is set to finish May roughly where it started. Photographer: Michael Nagle/Bloomberg

The Texas state flag is flown at half-mast, in honor of the of the victims of the Uvalde school shooting, outside the New York Stock Exchange (NYSE) in New York, US, on Tuesday, May 31, 2022. The S&P 500 defied bear market status just over a week ago and is set to finish May roughly where it started. Photographer: Michael Nagle/Bloomberg

Talks between Beijing and Washington to avoid the delisting of about 200 companies from New York stock exchanges are gathering pace with a plan to let US inspectors travel to Hong Kong to review audit documents of Chinese businesses.

Chinese regulators have instructed major accounting firms to prepare to bring the audit work papers of US-listed Chinese companies to Hong Kong, where they can be reviewed by the Public Company Accounting Oversight Board, according to a person who asked not to be identified as the discussions are private. The conversations, which remain ongoing, could result in a significant advance in a years-long standoff over the inspections, which are required for all firms that trade in the US.

Chinese stocks listed in the US are on pace for their best day since June

The clock is ticking to avoid a congressionally imposed deadline of 2024 for kicking out businesses that don’t comply from the New York Stock Exchange and Nasdaq. The Nasdaq Golden Dragon Index, which tracks Chinese firms trading in the US, surged the most in more than two months after The Wall Street Journal reported on the discussions earlier Thursday.

The PCAOB declined to comment. The China Securities Regulatory Commission and the US Securities and Exchange Commission didn’t immediately respond to requests for comment.

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The SEC has remained unwavering in its demand that US regulators get full access to the audits. SEC Chair Gary Gensler has said that US law gives him little room for compromise.
Bloomberg
first published: Aug 26, 2022 02:48 pm
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