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Chinese Tech Stocks Fall as U.S. SEC Begins Rollout of Law Aimed at Delisting

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Shares in duallisted Chinese companies fell sharply on Thursday in Asia after the U.S. securities regulator adopted measures that would kick foreign companies off American stock exchanges if they do not comply with U.S. auditing standards.

The move by the Securities and Exchange Commission SEC adds to the unprecedented regulatory crackdown in China on domestic technology companies, citing concerns that they have built market power that stifles competition.

The Holding Foreign Companies Accountable Act, signed into law by thenPresident Donald Trump in December, is aimed at removing Chinese companies from U.S. exchanges if they fail to comply with American auditing standards for three years in a row.

The rules also require firms prove to the SEC they are not owned or controlled by an entity of a foreign government and to name any board members who are Chinese Communist Party officials, the SEC said in a statement Wednesday.

The China Securities and Regulatory Commission CSRC did not immediately respond to a Reuters request for comment.

In Hong Kong, the news prompted a sharp selloff of the U.S.listed Chinese companies which have listed on the citys exchange in the past two years.

Baidu Inc shares which debuted on Tuesday dropped 8.85 in early Thursday trade, Alibaba Group Holding Ltd slipped 4.2, JD.Com Inc fell 4.45 and Netease Inc was down 3.

The falls were in contrast to a 0.2 increase in the broader Hong Kong Hang Seng Index and a 1 fall in the Hang Seng Tech…

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