Connect with us

Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website. .

Trading

Chinese tech stocks fall as U.S. SEC begins rollout of law aimed at delisting

Chinese tech stocks fall as U.S. SEC begins rollout of law aimed at delisting

By Katanga Johnson and Scott Murdoch

WASHINGTON/HONG KONG (Reuters) – Shares in dual-listed Chinese companies fell sharply on Thursday in Asia after the U.S. securities regulator adopted measures that would kick foreign companies off American stock exchanges if they do not comply with U.S. auditing standards.

The move by the Securities and Exchange Commission (SEC) adds to the ongoing and unprecedented regulatory crackdown in China on domestic technology companies, citing concerns that they have built market power that stifles competition.

The Holding Foreign Companies Accountable Act, signed into law by then-President Donald Trump in December, is aimed at removing Chinese companies from U.S. exchanges if they fail to comply with American auditing standards for three years in a row.

The rules also require firms prove to the SEC they are not owned or controlled by an entity of a foreign government and to name any board members who are Chinese Communist Party officials, the SEC said in a statement Wednesday.

The China Securities and Regulatory Commission (CSRC) did not immediately respond to a Reuters request for comment.

In Hong Kong, the news prompted a sharp sell-off of the U.S.-listed Chinese companies which have listed on the city’s exchange in the past two years.

Baidu Inc shares – which debuted Tuesday – dropped 10.45% in early Thursday trade, Alibaba Group Holding Ltd slipped 5.3%, JD.Com Inc fell 5% and Netease Inc was down 4.1%.

The falls outpaced a 0.2% decline in the broader Hong Kong Hang Seng Index and a 2.22% fall in the Hang Seng Tech Index.

“A lot of investors thought the U.S. and the Biden administration would be more amicable towards China and things would be easier, but this news shows that it is going to be just as tough,” Wealthy Securities managing director Louis Tse said.

DailyFX strategist Margaret Yang said the Chinese-listed stocks were also under pressure after it was reported that China was considering creating a state-backed joint venture with domestic tech firms to oversee user date.

“The latter probably marks a further tightening of government control over the technology sector,” she said.

The SEC fast-tracked the rules around how companies should submit documentation because it was required to issue them within 90 days of the Act becoming law.

The SEC is now seeking public comments on a process for identifying companies that fail to meet the standards.

The new rules come amid simmering tensions between the United States and China, with bipartisan support for a tough U.S. approach.

Last week in Alaska the two countries held their first high-level meeting under President Joe Biden’s administration, with both sides leveling sharp rebukes of the others’ policies.

A flurry of 11th-hour efforts under the Trump administration led to dozens of Chinese companies being delisted from U.S. exchanges and over-the-counter trading platforms in recent months due to allegations of Chinese military affiliations.

The SEC said it was still actively assessing how to roll out the rest of the law’s requirements, including the identification process and trading prohibition requirements.

(Reporting by Katanga Johnson; Additional reporting by Scott Murdoch in Hong Kong, Tom Westbrook in Singapore, Chris Prentice in Washington and John McCrank in New York; Editing by Jonathan Oatis and Christopher Cushing)

Global Banking & Finance Review

 

Why waste money on news and opinions when you can access them for free?

Take advantage of our newsletter subscription and stay informed on the go!


By submitting this form, you are consenting to receive marketing emails from: Global Banking & Finance Review │ Banking │ Finance │ Technology. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Post