On Saturday, China proposed revising confidentiality rules for offshore listings
This means, in effect, removing a legal impediment to Sino-US cooperation in audit control. This has long been a point of contention with US authorities. The delisting of around 270 companies from US stock exchanges has been threatened from 2024. Although the measures do not solve the problem definitively, it is a step further and should be positive for Chinese stocks.
The China Securities Regulatory Commission (CSRC) said the changes will facilitate “cross-border regulatory cooperation, including joint inspections, which will help protect the interests of global investors.” Saturday’s proposal removes the requirement that on-site inspection of overseas-listed Chinese companies be carried out primarily by Chinese regulators.
US regulators want full access to these companies’ audit working papers, this move opens the door for them.