One of China's top investment banks, according to a senior executive, believes the two countries will be able to reach an agreement on the auditing dispute that is threatening the listings of key Chinese companies on American stock exchanges.
Regulators from both countries are believed to be engaged in "honest" discussions with the goal of resolving the situation, according to Wang Sheng, head of the investment banking division at China International Capital Corp, who wrote an opinion piece for the Economic Daily on Sunday that was published on Monday.
Chinese President Xi Jinping has a newspaper that is affiliated with the State Council, which serves as the country's cabinet.
We believe that as participants in the capital markets of two countries, a solution can be found that ensures data security in the region where the companies are domiciled while also complying with the regulatory requirements of the region where the firms are listed, he wrote.
Following an investigation by the Securities and Exchange Commission, the US Securities and Exchange Commission identified five Chinese companies that violated the Holding Foreign Companies Accountable Act, which the PCAOB was unable to inspect, according to the Commission.
If the five companies fail to comply with the HFCAA's auditing requirements for three consecutive years, they may be delisted from US stock exchanges.
This year's list of companies to be included is based on information provided by the companies in their 2021 annual reports. Despite the fact that the list is expected to grow in the coming months as more companies file reports, Wang stated that they will not be required to exit the market immediately.
Responding to these concerns, the China Securities Regulatory Commission issued an official statement stating that it would welcome the opportunity to collaborate with US authorities on inspections and investigations of relevant accounting firms. Recent discussions between the CSRC, China's finance ministry, and the PCAOB have resulted in "significant progress," according to the report.
By fLEXI tEAM