Recent measures from U.S. lawmakers and Nasdaq to impose additional requirements on U.S.-listed China-based companies could have wider implications.

On May 20, 2020, the U.S. Senate unanimously passed the Holding Foreign Companies Accountable Act ("Act"), which could have significant implications for China-based companies that are publicly listed in the United States, including possible mandatory delistings for companies that fail to comply. The Act focuses on the inability of the U.S. Public Company Accounting Oversight Board ("PCAOB") to inspect auditors based in China and Hong Kong as part of their regular review of auditors of publicly listed companies. Companies whose auditors fail to be inspected by the PCAOB for three consecutive years will be subject to mandatory delisting.

In early June 2020, the Securities and Exchange Commission published Nasdaq rule proposals that would apply additional restrictions on companies from so-called "restrictive markets" that have laws or regulations restricting access to information by regulators of U.S.-listed companies in such jurisdictions. If the Act becomes law and the Nasdaq rule proposals are adopted, China-based companies will face additional challenges to become and remain publicly listed companies in the United States for as long as China continues to block PCAOB access to auditors in China.