SEC Has Tightened Its Scrutiny of Chinese Companies

The SEC has tightened its scrutiny on Chinese companies. Chinese companies that want to go public in the US are being investigated more closely.

The US Securities and Exchange Commission (SEC) announced that it will increase scrutiny of Chinese companies seeking to go public in the US. In a written statement, SEC Chairman Gary Gensler reminded that the Chinese government has imposed new restrictions on Chinese-based companies on raising capital overseas. Gensler stated that in line with the latest developments in China, he asked the SEC experts to request further clarifications from China-based companies. Gensler said Chinese companies' statements will also include information on Chinese authorities' permissions to trade on U.S. exchanges and the actions of the Chinese government that could significantly affect the operating company's financial performance and the applicability of contractual regulations.