Font Size: a A A

Research On The Cooperation In Securities Regulation Between The United States And China

Posted on:2016-12-22Degree:MasterType:Thesis
Country:ChinaCandidate:T TongFull Text:PDF
Abstract/Summary:PDF Full Text Request
In recent years, there has been an increase in the number of Chinese companies listed in the United States. However, starting from June 2010, several Chinese concept stocks encountered the short-selling crisis, as a result of financial fraud. Some Chinese companies were suspended from trading or delisted in the United States securities market. This crisis had a negative effect on the further financing of Chinese companies. What’s more, numerous overseas investors lost the confidence in Chinese companies. The U.S. Public Company Accounting Oversight Board (hereinafter referred to as PCAOB) came into contact with Chinese securities regulators, and they had a discussion about the bilateral supervision agreement in 2007. But there has been a slow progress in this negotiation since then. Due to the absence of cross-border regulatory cooperation mechanism, the U.S. Securities and Exchange Commission (hereinafter referred to as SEC) failed to request Chinese accounting firms to present the related Chinese companies’ audit working papers. Then SEC initiated an administrative execution lawsuit against the five accounting firms in December 3,2012, including BDO China Dahua CPA Co., Ltd., Pricewaterhouse Coopers Zhong Tian CPAs Limited, Deloitte Touche Tohmatsu CPA Ltd., KPMG Huazhen(Special General Partnership) and Ernst & Young Hua Ming LLP. SEC claimed that they refused to submit the related audit working papers, violating the Securities Exchange Act of 1934 and Sarbanes-Oxley Act of 2002. However, according to Chinese laws, Chinese accounting firms should not provide audit files to foreign regulatory agencies, without reporting to the competent department for approval. The cross-border regulatory cooperation on securities markets between the United State and China came to a deadlock. This paper starts from the SEC’s suit, and puts an emphasis on the issue of cross-border audit regulatory cooperation, and it is an important part of the securities market regulation. Besides the preamble and conclusion, this paper is divided into four chapters.The first chapter is a brief introduction of securities regulation and related concepts, and describes two major modes of cross-border securities regulation, containing unilateral regulation mode and international regulatory cooperation mode. Besides, this part analyzes the necessity of the cross-border regulatory cooperation from three aspects primarily.The second chapter mainly introduces three forms of the cross-border cooperation on securities regulation, including bilateral cooperation, regional cooperation and global cooperation. Then this part describes the present situation of international cooperation on securities regulation in the United States and China respectively, and states the main legal bases for international cooperation on securities regulation in these two countries.The third chapter describes the general situation of Chinese companies listed in the United States in recent years at first. This part states the regulatory system of overseas-listed companies in China and the supervision system of public accounting firms in the United States. This part also indicates that there exist some contradictions in the rules about audit working papers, and then discusses the current issue of the cross-border audit regulation between the United State and China.The forth chapter introduces the current situation of bilateral cooperation on regulation between the United States and China, and then reviews the past development history of cross-border regulatory cooperation, according to the above-mentioned SEC’s suit. Then this part analyzes the major reasons of cross-border supervision cooperation deadlock. In essence, the conflict of cross-border audit supervision between the United States and China is a game, and the regulatory agencies in these two countries both persist in safeguarding their own interests. In summary, the inherent contradictions in legal system, the principle of sovereignty, demands for regulatory cooperation and some differences in other aspects are the fundamental reasons. All these factors lead to the cross-border supervision deadlock between the United State and China now. In addition, the forth part discusses the United States extraterritorial jurisdiction in the field of securities law, and this discussion is based on analyzing the legitimate of claim and the reasonableness of enforcement. We object to the SEC’s unreasonable requirements, such as on-site inspection and taking audit working papers directly from Chinese accounting firms. At last, combining the international experience of securities regulatory cooperation, this part puts forward some suggestions on this problem, and looks forward to the future of cross-border regulatory cooperation between the United States and China.
Keywords/Search Tags:securities regulation, cross-border regulatory cooperation, audit working papers, agreement on regulatory cooperation
PDF Full Text Request
Related items