WASHINGTON — Chinese companies with shares traded on U.S. stock exchanges would be forced to give up their listings unless they comply with American accounting requirements under a plan recommended Thursday by the Trump administration.
The proposal addresses a long-simmering dispute over U.S. regulators’ inability to inspect the accounting quality of Chinese companies that sell shares here.
Under the plan, Chinese firms that are already listed on the New York Stock Exchange and Nasdaq Stock Market would have to comply by 2022 — or give up their listings on those exchanges.
To comply, Chinese auditors would have to share their work papers with U.S. audit regulators. Chinese firms that aren’t yet public — but plan an initial public offering here — would have to comply before they can go public on NYSE or Nasdaq, according to senior Treasury Department and Securities and Exchange Commission officials.
The plan is similar to bipartisan legislation that passed the Senate in May and was sponsored by Sens. John Kennedy, R-La., and Chris Van Hollen, D- Md. It would require rule making by the SEC, which ultimately oversees the accounting quality of companies whose shares are traded in the U.S.
An expanded version of this report appears on WSJ.com.
Also popular on WSJ.com:
Beirut explosion: What happened in Lebanon, and everything else you need to know.
How face masks work and which types offer the best COVID-19 protection.
