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U.S.-listed Chinese Companies Weigh Options as PCAOB Audit Requirements Near

International Financial Law Review

03 Dec 2021

Morrison & Foerster Partner B. Chen Zhu is quoted in an article “US listed Chinese companies weigh options as PCAOB audit requirements near” on December 3, 2021, by International Financial Law Review (IFLR).

According to the article, Chinese companies listed in the United States are looking for listing alternatives as they grapple with Public Company Accounting Oversight Board audit requirements. “There is broad bipartisan support in the US for government measures that are designed to be ‘tough on China’,” said Chen. “The SEC is seeking to crack down on Chinese companies that use a special offshore holding company structure [the VIE structure] to list in the US. That said, Chinese companies that are in less sensitive sectors, like those that do not hold large trovers of personal data, may still have access to US exchanges,” Chen added.

“While there was some optimism in past years from market participants that China and the US would come to a compromise, the regulatory environment has evolved with a focus on national and data security issues from both sides,” said Chen.

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