China securities watchdog says it expects audit deal with US regulators soon
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CHINA'S securities watchdog is holding regular talks with US regulators over audit cooperation and expects a deal soon, a Chinese regulatory official said on Thursday (Apr 21) about a dispute that could lead to delistings of US-listed Chinese companies.
The comments by Fang Xinghai, vice chairman of the China Securities Regulatory Commission (CSRC), represent the latest gesture from Beijing that it is willing to solve the long-standing dispute with Washington.
"Currently, we basically conduct negotiations via video link every 2 weeks, to finalise details," Fang told a panel discussion at the annual Boao Asia Forum.
"I'm very confident that we will reach an agreement in the near future, so that PCAOB could conduct checks on Chinese accounting firms in China in a reasonable way. This uncertainty will be removed soon, and this will be good news for Chinese stocks listed overseas."
The Public Company Accounting Oversight Board (PCAOB), the US audit regulator, is demanding complete access to audit working papers of New York-listed Chinese companies.
The request has so far been denied by China on national security grounds - a standoff that could lead to roughly 270 Chinese companies being forced to delist from Amercian exchanges by 2024.
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On Apr 2, China published draft confidentiality rules that would potentially give US regulators access to such working papers, through joint inspections or other form of regulatory cooperations.
Meanwhile, the rules put the onus on Chinese companies to protect state secretes.
There were previous media reports suggesting progress in the US-China talks, but US securities and audit regulators had pushed back on speculation of an imminent deal with China.
In March, the US Securities and Exchange Commission (SEC) identified 11 US-traded Chinese companies, including Baidu Inc and Yum China, that face delisting risks, and the list is growing longer.
Since a change of chairmen at both the SEC and PCAOB, "negotiations between the CSRC-led Chinese negotiation team and them have been progressing very smoothly", Fang said on Thursday.
He reiterated that "the CSRC's attitude is to support firms to list overseas, and support firms to choose markets where they want to list". REUTERS
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