As the barriers surrounding listing on the New York Stock Exchange have risen, such as US regulators tightening audit and verification of Chinese companies, Chinese companies are starting to list on the Swiss stock exchange one after another.
On the 18th, Nikkei Asia reported that three Chinese companies, including heavy equipment manufacturer Sani Heavy Industries & Construction, Lefu Medical Technology, and EV battery maker Gotion Hi-Tech, recently announced their second listing on the SIX Swiss Stock Exchange. The size and timing of the funding has not yet been disclosed, Nikkei Asia said.
It is analyzed that the reason these companies chose Switzerland over the New York Stock Exchange is because of the audit regulations introduced by the US government in 2020. At that time, the Trump administration enacted the Foreign Company Liability Act, which requires Chinese companies to submit detailed audit data to the US Listed Companies Accounting Supervisory Commission for verification, and to delist them if they refuse to do so. China has resisted, including refusing access to audits of Chinese companies on the grounds of security concerns. As a result, the number of new listings of Chinese companies on the New York Stock Exchange from 32 in the first half of last year has greatly reduced to three in the second half.
The Foreign Company Liability Act came into effect earlier this year, and on the 10th, the US Securities and Exchange Commission placed five Chinese companies listed on the New York Stock Exchange on the preliminary delisting list. The Chinese and Hong Kong stock markets plunged more than 7% for two days from the 14th to the 15th immediately after that, but on the 16th, the Chinese financial authorities announced that they were communicating with the US, and they rebounded sharply.
