(Yicai Global) March 11 -- China’s securities watchdog said it strongly opposes the politicization of securities regulation after its US counterpart named five New York-traded Chinese companies for possible delisting if they fail to submit comprehensive audit documents.

China is willing to resolve the issue of checks on listed Chinese companies by US authorities through regulatory cooperation, which is in line with international practice, the China Securities Regulatory Commission said in a question-and-answer article posted on its website today. 

The US Securities and Exchange Commission finalized a provisional list on March 8, requiring Yum China Holdings, which owns KFC and Pizza Hut in China, along with cancer treatment developer BeiGene, biotech firm Zai Lab, chip-making equipment manufacturer ACM Research, and drugmaker HutchMed China to provide evidence by March 29 as to why they should not be delisted under the Holding Foreign Companies Accountable Act.

US-listed Chinese stocks were routed yesterday after the SEC published the names of the firms in the first group for possible delisting. Among the five identified, ACM Research [NASDAQ: ACMR] dropped the most, plunging 22 percent. The others slid from 5 percent to 11 percent.

China’s securities regulator and finance ministry have been in constant contact with the US Public Company Accounting Oversight Board, and positive progress has been made, the CSRC said.

The Holding Foreign Companies Accountable Act became law in December 2020. It stipulates that foreign companies can be forced to delist from US bourses if they fail to comply with the PCAOB's audits for three straight years. A number of analysts said the Act mainly targets US-listed Chinese firms even though it also applies to companies from other countries.

Editor: Emmi Laine, Xiao Yi