China had to comply and allow US regulators to gain access to audit reports on more than 200 Great Wall -owned firms listed in New York.
It means China needs to modify a decade-long rule that restricts the financial data sharing practices of its off-shore-listed firms, thus giving the U.S. government a chance to conduct audits.
For the record, the regulation published in 2009 by China states that any working paper drafted on-shore during the process of selling shares abroad is prohibited from being shared with any foreign entity or individual.
The policy enactment marks an unusual reversal by Beijing that could potentially end a decades -long dispute when the U.S. set a 2024 deadline to delist businesses that do not comply with New York Stock Exchange and Nasdaq rules.
In addition, it also demonstrates China's readiness to balance national security concerns with the needs of investors and businesses at a time when the economy is facing various challenges.
Generally, the rules also state that any paperwork related to national secrets or national security is also prohibited from being stored, processed and sent in non -confidential computer systems.
According to the China Securities Regulatory Commission (CSRC), the revised draft regulations have eliminated the need for on-shore inspections to be conducted primarily by Chinese regulatory agencies or rely on their inspection results alone.
He further explained that the CSRC will also provide assistance during the process through the cross -border regulatory cooperation mechanism.
Meanwhile, all firms listed directly or indirectly overseas will be responsible for properly managing confidential and sensitive information as well as national information security protection.
Meanwhile, US -listed Chinese shares rose last Friday following reports that regulators in Beijing were working on a framework that gives full access to audit reports for the majority of New York -listed firms.
The summary of this regulation by China is that it is trying to boost investor confidence following a series of crackdowns that have clouded the market.
Through it, China’s top financial regulator last month expressed support for overseas listings whose prospects were overshadowed by a bunch of new regulations and disagreements with the U.S. over access to firm audits.
Such audit reviews can help reduce national security risks in listed frima share data and allow them to open up audit work to U.S. regulators when needed.
