SEC delisting warnings were followed by Chinese audit concession hopes which were then followed by a U.S. statement that any celebration is «premature». The threat of Chinese stocks being booted out of American exchanges continues to be a seesawing matter.
Over the weekend, state media claimed that Chinese and U.S. regulators were working to reach a solution and «moving toward each other» on the matter of U.S.-listed Chinese companies.
According to a report by the official China Securities Journal citing unnamed sources, the China Securities Regulatory Commission (CSRC) held «efficient, candid and professional» talks with U.S. regulators, adding that the efforts were in «the best interests of the capital markets of both countries and global investors».
Market Speculation
Of note in the state media report published on Sunday was a warning by the CSRC cautioning watchers not to trust speculation by other media with little knowledge about details of the talks, adding that such reports caused disturbances to market expectations.
This is likely in reference to recent media reports claiming that Beijing was preparing concessions on restricted foreign access to Chinese audit information with inspections by U.S. authorities permitted as soon as this year.
«Premature» Optimism
The timing of the Chinese state media report is also interesting as it follows a statement by the U.S. Public Company Accounting Oversight Board (PCAOB) last week that optimism about an audit inspection agreement with Beijing was «premature».
According to a statement by the PCAOB last Thursday, talks were still ongoing and it «remains unclear» whether Beijing will «permit and facilitate» auditing access.
«Full Access» Non-Negotiable
While there are concurrent reports that Beijing has proposed the idea of providing limited access for foreign accounting regulators, PCAOB stressed that «full access to relevant audit information» was «not negotiable».
It added that any agreement would only mark a «first step» towards compliance and «an agreement without successful execution will not satisfy U.S. law».
