US steps up disclosure pressure on Chinese companies

Chinese companies will have to disclose more information about audits and whether they are controlled by a government or else leave U.S. stock markets under a rule approved by securities regulators

WASHINGTON -- Chinese companies will have to disclose more information about audits and whether they are controlled by a government or else leave U.S. stock markets under a rule approved by securities regulators.

The rule approved Thursday by the Securities and Exchange Commission steps up a long-running standoff between Washington and Beijing over how much information companies with U.S.-traded shares must disclosed.

Companies that used an auditor in a foreign jurisdiction will be required to confirm they are not “owned or controlled by a government entity” there, according to the SEC. Companies also will be required to disclose additional information in annual reports.

“Trading prohibitions” can be imposed on some companies, the SEC said.