![]() The act requires foreign companies to provide three-year audit working papers to the Public Company Accounting Oversight Board (PCAOB), otherwise, they may be forcibly delisted. Reviewing the timeline of relevant events in the past two years may shed some light on future development.Īfter the Luckin Coffee fraud event in April 2020, the US Congress passed the Holding Foreign Companies Accountable Act (passed the Senate on May 20, 2020, and passed the House on December 2, 2020). Clearly, the SEC has no choice but to step up and protect US investors from further losses related to the country’s risk. The Nasdaq Golden Dragon China Index (HXC: NASDAQ) saw over 15% knocked off within two trading days after the announcement. According to the new private tutoring rule, all institutions offering tutoring on the school curriculum will be registered as non-profit institutions, and the Chinese Government will not grant new licenses to such companies. Obviously, the statement was mainly caused by the DiDi event ( check here) and the new private tutoring regulations starting from July 23, 2021. In the statement, the author also made investors aware of the fact that they will only own stocks of shell companies (Variable Interest Entities, VIEs) rather than operating companies in China. Exchange Commission Chair Gary Gensler published a statement saying that China-based operating companies should disclose extra information, including their legal structures and the risk of the Chinese government interfering in their businesses, to be listed in US markets. Here we present a timeline of the recent China Concepts Stocks-related events and analyze the inner reasons of the new SEC Statement and its impact. regulators will potentially gain more access to audit documents of New York-listed Chinese companies.Your browser does not support the audio element. listing plans and opt for Hong Kong instead, with one source at the time citing Beijing’s concerns that U.S. In May, Reuters reported that Beijing was pressing audio platform Ximalaya to drop U.S. could gain greater access to data owned by Chinese firms – similar to concerns that the previous Trump administration had voiced about Chinese firms operating in the U.S. The tougher position by the Cybersecurity Administration of China has been driven in part by concerns that the U.S. Securities and Exchange Commission (SEC) to list in the United States later this year, a review of the filings showed. listings, Refinitiv data show, well up from the US$1.9-billion from 14 deals in the same period a year ago.Įight Chinese companies including home service platform Daojia Ltd. ![]() So far this year, a record US$12.5-billion by Chinese firms has been raised from 34 U.S. capital markets have been a lucrative source of funding for Chinese firms in the past decade, especially for technology companies looking to benchmark their valuations against listed peers there and tap an abundant liquidity pool. (CICC) were the investment banks on the deal and all declined to comment to Reuters. Morgan Stanley, Bank of America and China International Capital Corp. LinkDoc did not immediately respond to a request for comment. The sources declined to be identified as the information has not yet been made public. The book closed one day earlier than planned on Wednesday, one of the three sources and a separate person said. It had planned to sell 10.8 million shares between US$17.50 and US$19.50 each. and make it more difficult to raise funds overseas,” he said.īacked by Alibaba Health Information Technology Ltd., LinkDoc filed for its IPO last month and was due to price its shares after the U.S. “The new rules may impose long waiting periods on any companies hoping to list abroad, which will hit investor sentiment, depress valuations for IPOs in the U.S. listing, they may have to wait for further clarification, stricter scrutiny and preapproval from different regulators and authorities,” said Bruce Pang, macro and strategy research head at China Renaissance Securities. LinkDoc’s decision to suspend its US$211-million IPO, first reported by Reuters, is likely to be followed by others, analysts said, although they said U.S.
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