The Securities and Exchange Commission (SEC) has expanded a list of companies that might be excluded from the US stock exchanges. More than 80 Chinese firms, including game publisher NetEase, are now facing delisting.
The lineup was made under the Holding Foreign Companies Accountable Act, Bloomberg reported on May 4. This is a 2020 law requiring companies listed on the US stock exchanges to declare whether they are controlled or owned by the Chinese government.
Companies risk being delisted in case they fail to provide regulators with specified audits for three years in a row. So that’s why the SEC added more than 80 Chinese firms to the list, including NetEase, JD.com, Bilibili, and JinkoSolar.
According to Bloomberg sources, Chinese authorities will grant US regulators full access to the auditing reports of the majority of companies listed in New York as soon as the middle of this year.
This would help resolve the issues, so these companies could continue to trade on the US stock exchanges. Otherwise, they might be removed in 2024.