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Hong Kong treasury secretary Christopher Hui, audit regulator deny claims of non-cooperation made by SEC’s Gary Gensler

  • SEC statement ‘unfair and ungrounded’, says Christopher Hui
  • Financial Reporting Council says the city has always allowed the US’s Public Company Accounting Oversight Board access to Hong Kong auditors and their working papers

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Hong Kong’s Central business district. Photo: Sam Tsang
Enoch Yiu

Hong Kong’s top treasury official and audit regulator have hit back against claims by the US Securities and Exchange Commission (SEC) that the city along with China does not cooperate with regulators in the US.

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Christopher Hui Ching-yu, the city’s Secretary for Financial Services and the Treasury, and the Financial Reporting Council (FRC), the regulator in Hong Kong, rejected the claim and said the city has always allowed the US’s Public Company Accounting Oversight Board (PCAOB) access to Hong Kong auditors and their working papers.

“We regret to see the US SEC in its statement on December 2 [describing] Hong Kong as a jurisdiction not having worked with the US PCAOB, which is unfair and ungrounded,” Hui said in a statement late on Friday. “We urge the US SEC to correct its misleading statement.”

The response followed comments by SEC chairman Gary Gensler, who on Thursday said that Hong Kong and mainland China were the only two jurisdictions that had “historically” not worked with the PCAOB, while 50 others had done so. He highlighted Hong Kong and China’s non-cooperation in a statement announcing the final amendments to the Holding Foreign Companies Accountable Act of 2020, which became law at the end of last year.

The law stipulates that any foreign company listed on US exchanges faces delisting if it fails to turn over audit results for three straight years.

US Securities and Exchange Commission chairman Gary Gensler. Photo: Reuters
US Securities and Exchange Commission chairman Gary Gensler. Photo: Reuters

The most recent US inspection in Hong Kong took place in 2013, said Kelvin Wong Tin-yau, the FRC’s chairman. “There is no restriction on the PCAOB being able to inspect working papers in Hong Kong. PCAOB officials have free access to inspect in Hong Kong,” he said in an interview, adding that the PCAOB and the SEC used to make a distinction between Hong Kong and mainland China.

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