Lest anyone think otherwise, Securities and Exchange Commission (SEC) Chair Gary Gensler made it clear that he fully intends to keep the three-year deadline that foreign companies have, particularly Chinese ones, to submit to regulated audit requirements or else face delisting, Bloomberg reported. 

The rule, an artifact from the previous administration, requires that foreign companies undergo audits that are compliant with Public Company Accounting Oversight Board (PCAOB) rules by 2024, or else lose access to public exchanges in the United States. While the rule applies to foreign companies in general, it was constructed specifically with China in mind. 

PCAOB access to Chinese audits has long been a source of tension between the two countries. While the PCAOB and its Chinese counterpart tried for years to negotiate a joint inspection agreement similar to the ones established in many other countries, the talks ultimately collapsed in 2015. A major sticking point in the negotiations was that a program of the type the PCAOB was proposing would have run afoul of China's strict laws on sharing information with foreign entities. The PCAOB, meanwhile, has expressed concern on numerous occasion about the accuracy of the numbers coming from Chinese audit firms on companies seeking to be listed on U.S. exchanges.  

While there is a new administration in the White House, Gensler pledged that he would strictly enforce the rule's deadline, saying that noncompliant companies could be delisted as early as 2024. This, said Bloomberg, has dashed the hopes of those in both the United States and China who've been benefitting from such companies that he would delay or draw out the rule's implementation. While the Chinese government has recently made overtures towards a resolution, Gensler did not indicate that a resolution was near, saying it is more likely that the rule will stand as is.