U.S. Securities and Exchange Commission at the SEC in Washington on Thursday, March 28, 2019.
Bill Clark | CQ-Roll Call Group | Getty Images
A bipartisan group of U.S. lawmakers introduced a bill on Wednesday to force Chinese companies listed on American stock exchanges to submit to regulatory oversight, including providing access to audits and other steps now restricted by Chinese law.
“Beijing should no longer be allowed to shield U.S.-listed Chinese companies from complying with American laws and regulations for financial transparency and accountability, ” Republican Senator Marco Rubio said in a statement.
Democratic Senator Bob Menendez, who joined in sponsoring the bill, said, “It’s time for China’s government to play by the same rules as American companies in our financial markets.”
The U.S. Securities and Exchange Commission and the Public Company Accounting Oversight Board issued a warning to investors last year about the difficulties U.S. regulators have had in inspecting the audit work and practices of auditing firms in China that examine U.S.-listed Chinese companies.
They said the PCAOB has faced obstacles in inspecting auditing work for 224 U.S.-listed companies with a market capitalization of $1.8 trillion.
Chinese law requires the business books and records to be kept and maintained in China, and it restricts the auditors’ documentation of work performed in China from being transferred outside the country, they said.