US Speeds Up Timeline in Delisting Threat For Chinese Companies

Chinese companies that have their shares listed on American stock exchanges should be more transparent with their audits.

If Washington regulators can't fully review audit work papers, companies will be kicked off the New York Stock Exchange. The Public Company Accounting Oversight Board gained access to audit documents from firms in China and Hong Kong for the first time last week.

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China and the US had been at odds over the issue for a long time. Roughly 200 companies from Hong Kong and China that trade on US exchanges could be affected by the provision in the funding package.

John Kennedy said in a statement that he has been fighting for more accountability for foreign companies that use American capital. He said that regulators are getting the power to remind China that playing by the rules isn't optional.

As the US gets access to audits, the China delisting threat is easing.

The legislation would soon be signed by the president, according to the White House.

As tensions grew during the Trump administration, the audit issue became a political one. Congress set out a three-year timetable for delisting shares for companies that can't be reviewed by the US.

The chair of the PCAOB said that ranking up the pressure will help hold China's feet to the fire and keep investors protected.