{"id":301336,"date":"2026-02-16T19:51:08","date_gmt":"2026-02-16T19:51:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/301336\/"},"modified":"2026-02-16T19:51:08","modified_gmt":"2026-02-16T19:51:08","slug":"uk-proposes-audit-changes-to-attract-chinese-listings","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/301336\/","title":{"rendered":"UK proposes audit changes to attract Chinese listings"},"content":{"rendered":"

Unlock the Editor\u2019s Digest for free<\/p>\n

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/p>\n

The UK accounting regulator is considering changes to strict auditing rules to encourage more Chinese companies to list in London in response to a government push to revive the City\u2019s flagging stock market.<\/p>\n

The change, put forward by the Financial Reporting Council<\/a> on Monday, would permit Chinese-registered entities to employ domestic auditing standards when they use London to offer global depositary receipts \u2014 securities that allow investment in companies listed overseas.<\/p>\n

It comes amid growing anxiety about the waning attractiveness of the UK\u2019s equity markets<\/a> for companies and investors in comparison to Wall Street. <\/p>\n

Western financial regulators have grappled for years with Chinese audits because of concerns over restrictions on access to documentation, an issue that became a flashpoint\u00a0between Beijing and Washington during the Biden administration.<\/p>\n

At present, if a Chinese company wants to raise money by listing global depositary receipts in London, it has to follow UK-approved auditing standards to protect investors.<\/p>\n

But the FRC has now launched a consultation on temporarily amending its \u201cthird country auditor\u201d policy \u201cto address a perceived barrier discouraging some Chinese-registered issuers from choosing the UK as a listing venue\u201d. <\/p>\n

The move comes just weeks after UK Prime Minister Sir Keir Starmer visited Beijing in an effort to thaw relations with the world\u2019s second-largest economy.\u00a0\u00a0<\/p>\n

\u201cEngaging with China is how we secure growth for British businesses, support good jobs at home and protect our national security,\u201d said Starmer at the end of his\u00a0four-day\u00a0China visit, calling for an\u00a0end to the diplomatic \u201cice age\u201d with Beijing.<\/p>\n

Hopes that online fast-fashion retailer Shein would list in London were dashed last year. The Chinese-founded company filed for an IPO in Hong Kong<\/a> after UK and Chinese regulators failed to agree on appropriate language to be used in the risk disclosure section of its prospectus.<\/p>\n

Allowing Chinese auditing standards to be used temporarily would \u201cencourage eligible Chinese registered entities to list on the London Stock Exchange\u201d, the FRC said. <\/p>\n

It added: \u201cThe proposed change is narrowly scoped, time\u2011limited and includes safeguards designed to uphold investor protection and market integrity, pending a longer-term legislative solution.\u201d<\/p>\n

The change would apply only to companies registered in China that have been listed on Stock Connect, an existing agreement between UK and Chinese regulators designed to make it easier for companies in both countries to access each other\u2019s investors.<\/p>\n

The proposed amendment would align with the government\u2019s push to boost UK economic growth and strengthen the London market\u2019s competitiveness, the regulator said, adding it was seeking views on whether it appropriately balances audit quality with economic growth.<\/p>\n

The FRC warned that it had concluded in 2022, following an earlier request from the finance ministry in Beijing, that Chinese auditing standards were not equivalent to standards used in the UK and \u201cthere has been potential for further divergence since then\u201d.<\/p>\n

In the past, accounting scandals afflicted several US-listed Chinese companies including Nasdaq-listed Luckin Coffee, which was fined $180mn in 2020 for materially misstating revenue and net losses.<\/p>\n

A number of Chinese companies were also delisted or suspended from the New York Stock Exchange in 2011 and 2012 following fraud and accounting problems.<\/p>\n

This came after a wave of reverse-merger listings, in which Chinese groups bought US-listed shell companies to bypass IPO scrutiny.<\/p>\n","protected":false},"excerpt":{"rendered":"Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this…\n","protected":false},"author":2,"featured_media":301337,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,113,61,60],"class_list":["post-301336","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-ie","tag-ireland"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/301336","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=301336"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/301336\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/301337"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=301336"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=301336"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=301336"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}