The CSRC said it respects regulation by foreign regulators, but firmly opposes the approach of some forces to politicize securities regulation.
Investor fears about the delisting of Chinese companies from the US stock market reached a new high with the release of a list by the US Securities and Exchange Commission (SEC) causing shares of Chinese companies to plummet.
The Nasdaq Golden Dragon China Index (INDEXNASDAQ: HXC) plunged 10.01 percent by Thursday's close, the biggest one-day drop since October 2008.
US-listed Chinese electric vehicle stocks all fell sharply, with Nio (NYSE: NIO, HKG: 9866) down 11.9 percent, Xpeng (NYSE: XPEV, HKG: 9868) down 9.01 percent and Li Auto (NASDAQ: LI, HKG: 2015) down 5.94 percent.
With the debut of Nio's shares in Hong Kong on Thursday, all three of these leading EV makers have their shares listed in Hong Kong.
Compared to them, some Chinese tech giants are down even more, with iQIYI down 21.71 percent, Pinduoduo down 17.49 percent and Bilibili down 14.1 percent.
Delisting fears
This may be due to the SEC's March 8 release of the provisional list of issuers identified under the Holding Foreign Companies Accountable Act (HFCAA) being noted, which includes five Chinese companies: BeiGene, Yum China, Zai Lab Limited, ACM Research, and HUTCHMED.
Under the HFCAA, the SEC has the authority to delist a listed foreign company from the exchanges if it fails to file reports required by the Public Company Accounting Oversight Board (PCAOB) for three consecutive years.
The five companies have until March 29 to provide evidence to the SEC that they are not eligible to be delisted. If they are unable to do so, they will conclusively identified.
Companies placed on the final list will be required to file the documents required by the SEC within three years, and if they fail to do so, they will be delisted after disclosing their 2023 annual reports.
By Thursday's close, BeiGene was down 5.87 percent, Yum China was down 10.94 percent, Zai Lab Limited was down 9.02 percent, ACM Research was down 22.05 percent and HUTCHMED was down 6.53 percent.
CSRC again urges cooperation
In a Q&A released at 00:30 am today, the China Securities Regulatory Commission (CSRC) said they had taken note of the situation, saying it was a normal step for US regulators to enforce the HFCAA and related implementation rules.
"We respect the enhanced supervision of relevant accounting firms by overseas regulators to improve the quality of financial information of listed companies, but firmly oppose the wrong approach of some forces to politicize securities regulation," the CSRC said.
"We always adhere to the spirit of openness and cooperation and are willing to address the issue of US regulators conducting inspections and investigations of the relevant firms through regulatory cooperation, which is also in line with the internationally accepted practice," the CSRC added.
In recent times, the CSRC and the Ministry of Finance have continued their communication and dialogue with the PCAOB and have made positive progress, the Chinese securities regulator said.
"We believe that through joint efforts both sides will be able to make cooperation arrangements that meet the legal provisions and regulatory requirements of both countries as soon as possible, so as to jointly protect the legitimate rights and interests of global investors and promote the healthy and stable development of the markets of both countries," the CSRC said.
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