China’s securities regulator refuted media reports that the regulator was planning a three-tier system to help Chinese companies avoid possible US delisting in a statement to CNBC.
What happened: China Securities Regulatory Commission (CSRC) has denied the Financial Times report that Xi Jinping’s government is preparing a system to separate Chinese companies listed in the United States into three groups based on their level of data sensitivity.
The FT report had said that this system would help some of the Chinese companies listed in the United States like Alibaba Holdings Group BABA, Nio Inc. NIOand Tencent Holdings TCEHY comply with US regulatory requirements to be able to inspect audit documents.
See also: China’s regulatory easing will likely trickle down to tech companies including Alibaba – Here’s how
China’s regulator said it had not studied such plans and that companies would have to comply with data security and registration rules whether they are made public in China or abroad, according to CNBC. .
The regulator further added that further information on ongoing discussions with US regulators is expected to come from official announcements.
Earlier, the US Securities and Exchange Commission named specific Chinese companies listed in the United States that faced potential delisting from US stock exchanges under the Foreign Company Liability Act (HFCAA law).
The law threatens to kick Chinese companies out of US stock exchanges if they fail to comply with auditing rules set by the US Public Accounting Oversight Board.
Read also: Which Chinese companies are at risk of being delisted from US stock exchanges?
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