Markets optimistic after US gains access to Chinese firms’ audit papers
China Business Law Journal
China Business Law Journal
Vivian Yiu and Marcia Ellis were quoted in a recent article published by China Business Law Journal, following the news that the Public Company Accounting Oversight Board (PCAOB) can inspect China-based accounting firms for the first time in history.
Vivian was quoted as saying the firm has adjusted its advisory strategy. “Whereas we would have previously discouraged all Chinese companies from attempting to list in the US, we are now cautiously optimistic that companies that do not operate in sensitive sectors or hold sensitive data should be able to complete US IPOs.”
She also added that she had observed a notable rise in US IPO requests for proposals from Chinese brokerage firms.
Marcia said companies operating in grey areas may face obstacles on their way to a US listing. “The SEC will continue to be cautious about allowing companies using VIE structures to list in the US and will very likely subject China-headquartered listing candidates to many more rounds of questions than those addressed to listing candidates from other jurisdictions.”
Besides the audit hurdle, another major overhang for the Chinese company is the cybersecurity review. “If a company holds any sensitive data, it may be difficult for that company to pass cybersecurity clearance and complete an IPO. Such companies will have to list in Hong Kong or on the mainland,” she said.
Read the full article and the Chinese version.
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