• On Thursday, the SEC moved closer to expulsion of Chinese stocks that fail to meet audit requirements.
• The regulator approved rules for the implementation of a law that requires Chinese companies and their auditors open their books to US inspections.
• Gary Gensler, Chairman of the SEC, has stated that trading in shares from about 270 companies linked to China could be stopped by the agency.

The US Securities and Exchange Commission announced Thursday that foreign companies could be delisted from the stock market if they do not comply with disclosure requirements. This is in line with the US Securities and Exchange Commission's goal of kicking out Chinese companies who are non-compliant.

In a statement, Gary Gensler, SEC Chair, stated that public securities can only be issued in the United States if the audit firms of your books are subject to inspection by The Public Company Accounting Oversight Board.

"This final rule advances the mandate Congress established and goes to the heart the SEC's mission of protecting investors."

Gensler stated in a September Wall Street Journal op-ed that his agency would crack down on trading of shares in about 270 companies linked to China by 2024 if they don't allow US regulators to inspect their auditors.

The SEC's Thursday ruling will apply a law that requires Chinese companies and their auditors open their books for inspection by the US.

China has for over a decade refused to permit the PCAOB to review audits of companies like Baidu and Alibaba, whose shares trade in America, to be reviewed by the PCAOB.

Gensler stated Thursday that "the Commission and the PCAOB would continue to work together in order to ensure that auditors of foreign businesses accessing U.S capital markets play according to our rules." "We hope that foreign governments, in collaboration with the PCAOB will take steps to make this possible."