The first batch of ADRs identified as failing to comply with the HFCAA are Yum China, BeiGene, Zai Lab, ACM Research and HUTCHMED, as they recently filed annual reports with SEC. Four of these companies already have been listed in Hong Kong and China although liquidity remains higher in the US markets.
On March 10, 2022, the SEC identified the first five US-listed Chinese ADRs that will be subject to forced delisting with a three-year countdown upon finalisation.
As required by the Holding Foreign Companies Accountable Act (HFCAA) that was passed in 2020, the SEC has the responsibility to delist companies from US exchanges if the Public Company Accounting Oversight Board (PCAOB) is unable to review companies’ audits for three years consecutively.
