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China’s securities regulator denies report of a delisting survival plan

A China Securities Regulatory Commission sign is seen at the regulator’s headquarters on November 16, 2020 in Beijing.
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BEIJING — China’s securities regulator told CNBC in a statement it has not researched a plan for a three-tiered system to help Chinese companies avoid U.S. delisting.

The Financial Times reported, citing sources, that China is preparing a system to separate U.S.-listed Chinese companies into three groups based on their level of data sensitivity. The report said that system would help some Chinese companies come into compliance with U.S. demands to be able to inspect audit papers.

The China Securities Regulatory Commission added that companies should comply with data security and listing rules, regardless of whether they were going public on the mainland or abroad. The regulator said other information about ongoing discussions with U.S. regulators should come from official announcements.

Regulators in Washington and Beijing have been working to resolve an audit dispute that has threatened U.S.-listed Chinese companies with delisting.

Since March, the U.S. Securities and Exchange Commission named specific U.S.-listed Chinese stocks that fail to adhere to the Holding Foreign Companies Accountable Act. Passed in 2020, the act would allow the SEC to delist Chinese companies from U.S. exchanges if American regulators cannot review company audits for three consecutive years.

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