US proposes tougher Wall Street rules for China firms
Aug 07, 2020 - 08:01 AM
NEW YORK — US officials on Thursday proposed toughening rules for Chinese companies listed on American stock exchanges as recent scandals have prompted concerns about the reliability of some of the firms’ documents.
The companies’ auditors would have to share their work papers with American regulators under the proposal from a working group led by Treasury Secretary Steven Mnuchin.
Firms already on Wall Street would have until 2022 to comply or lose their listing.
“The United States is the premier jurisdiction in the world for raising capital, and we will not compromise on the core principles that underpin investor confidence in our capital markets,” said a Treasury Department statement.
The group, which includes Federal Reserve Chair Jerome Powell, also proposed strengthening risk disclosures to investors about companies or funds from countries that do not provide “sufficient” access to documents.
The US Securities and Exchange Commission (SEC), which oversees US equity markets, would be tasked with implementing the recommendations.
Several Wall Street-listed Chinese companies have been involved in scandals in recent months, including coffeehouse chain Luckin Coffee. The Starbucks rival revealed in April that one of its executives was accused of faking sales figures.
The recommendations come as tensions spike between the world’s top two economies, with a struggle over the video sharing platform TikTok being the latest flashpoint.
However, US media have reported that negotiators from the two nations are due to talk August 15 about the partial trade deal inked in January.