This applies primarily to those Chinese firms trying to make an initial public offering of shares in the United States through offshore companies.
The US government intends to tighten the requirements for Chinese companies seeking to place their securities on the US stock market to gain access to their financial statements. This is stated in a written statement issued on Friday by the head of the Federal Securities and Exchange Commission (SEC) USA by Gary Gensler.
As specified in the document, the decisions taken by Gensler primarily concern those Chinese firms that are trying to make an initial public offering of shares in the United States through offshore companies. In addition, all Chinese firms “seeking to register securities with the SEC-directly or through an offshore company” – will have to notify the US authorities about whether Beijing gave them permission to place shares on US stock exchanges or refused it, whether there is a threat of revocation of consent if granted. Finally, Chinese companies trying to enter the American market will be required to have access to their financial statements for three years. If a Chinese firm fails to provide such information, it may be decided to terminate the quotations of its shares on the US stock exchanges.