Q: What is China Securities Regulatory Commission (CSRC)'s attitude towards the recent statment of the Chairman of the Securities and Exchange Commission (SEC) on China-US audit supervision cooperation?
A: We have noted the recent statement by the SEC Chairman in a TV interview with the media on the China-US audit supervision cooperation. As Mr. Gensler said, regulators on both sides have engaged in thoughtful, respectful and productive conversations. Since last August, Yi Huiman, Chairman of the CSRC, and Chairman Gensler have held three videoconferences to discuss the resolution of remaining issues in the China-US audit supervision cooperation. The Chinese side and the U.S. Public Company Accounting Oversight Board (PCAOB) have even held several rounds of frank, professional and efficient talks, which are generally progressing well, and communication between the two sides will continue. Both sides have the will to reconcile differences and resolve problems, and the final outcome will depend on the wisdom of both sides.
For the companies added to the provisional list, we have learned from the SEC that it is a normal procedure for the US regulators to implement the Holding Foreign Companies Accountable Act (HFCAA), and whether the companies will be delisted in the next two years depends on the progress and outcome of the China-US regulatory cooperation on audit issues.