The Securities and Exchange Commission will begin implementing a law that will boot firms of the New York Stock Exchange or Nasdaq for failing to comply with accounting standards.
The SEC will take initial steps to pressure accounting firms to let U.S. regulators review the financial audits of overseas companies, according to a statement.
Any business that refuses inspection by the U.S. Public Company Accounting Oversight Board (PCAOB) of their audits for three years could face the penalty of delisting from the New York Stock Exchange or Nasdaq.
The law also requires firms to disclose whether or not they are under government control.
China Risk
Introduced under the Donald Trump administration, the law will now see its early stages of implementation under the Joe Biden administration which has publicly committed to stay strong on China.
Some industry leaders, such as Vanguard principal Rodney Comegys, have predicted that moves to boot Chinese stocks from U.S. exchanges could lead to listing shifts to Hong Kong.
