China Securities Regulatory Commission (CSRC) in Beijing Photo:VCG

China's top securities regulator on Wednesday vowed in a meeting to establish a regularized mechanism for cooperation in audit supervision between China and the US, in a bid to cultivate a more stable and predictable international regulatory cooperation environment.

The meeting, led by China Securities Regulatory Commission (CSRC) Chairman Yi Huiman, emphasized the need to expand high-level institutional opening up of capital markets, as part of the efforts to consistently carry out the directives of the Central Economic Work Conference and better support overall economic development.

The meeting took place amid recent successes in cooperation between China and the US in audit supervision, demonstrated by the recent announcement from the US accounting watchdog that it was able to fully inspect and investigate accounting firms headquartered in the Chinese mainland and Hong Kong in 2022. As a result, the US watchdog has decided to revoke some of its previous determinations that it was unable to inspect or investigate these firms in China, according to a statement from the US Public Company Accounting Oversight Board (PCAOB).

The US decision sent a positive signal that the risk of over 200 Chinese companies being forced to delist from US stock exchanges has been partly removed, at least for the short term, after both sides reached an audit cooperation agreement in August.

In responding to the US move, China's securities regulator said that China welcomes the latest progress made in China-US audit oversight cooperation, which proves that "a practical path for cooperation that accommodates the legal and regulatory requirements in both jurisdictions" can certainly be found as long as both sides work together based on mutual respect, professionalism and pragmatism.

The China-US Audit Supervision Cooperation Agreement signed by the CSRC, the Ministry of Finance and the PCAOB on August 26, 2022, included inspections and investigations of relevant accounting firms by both parties under the framework of bilateral regulatory cooperation.

Since the signing of the cooperation agreement, regulators from the two sides have strictly implemented their respective laws, regulations and agreements, and cooperated to carry out a series of fruitful inspections and investigations. All work is progressing smoothly, according to the CSRC.

While emphasizing the importance of establishing a normal cooperation mechanism for China-US audit supervision, CSRC stated at Wednesday's meeting that they will work to implement the reform of the overseas listing system for enterprises and expedite the process for approving "green light" cases for the overseas listing of platform enterprises.

The regulator also pledged to further promote the implementation of the Shanghai-Shenzhen-Hong Kong Stock Connect to expand targets and optimize the trading calendar.

Global Times