China to give US access to audit data to stave off mass expulsion of Chinese companies from US exchanges
- The Chinese body agrees to grant access to redacted auditing data in effort to stop Chinese stocks being expelled from US exchanges, sources say
- US officials will be in Hong Kong by mid-September to commence their review after screening by Chinese authorities
China and the United States signed an accord granting the US accounting oversight board access to Chinese audit data, ending an impasse that has wiped billions of dollars off Chinese stocks with the spectre of mass expulsion from US exchanges.
“The cooperation will start soon,” the CSRC said. The agreement “has also been reached on the cooperation framework for regulatory inspection and investigation activities to be conducted by accounting firms, which will meet the rules and regulations of both sides”, it said.
Before the signing of the agreement, the CSRC had been working on a new approach to end the impasse with the PCAOB, including a plan for the access to be conducted in Hong Kong, sources told the South China Morning Post.
The CSRC, mandated by a 2019 law to work with overseas regulators on the transfer of securities-related documents, is agreeable to the audit papers of Chinese companies being inspected by foreign regulators, provided certain names and address of factories, customers and vendors are redacted before the papers are released, sources said.
Confidential data such as personal identity numbers must also be redacted, as required by China’s cybersecurity laws, the sources added.
