SEC Puts US-Listed Chinese Biopharma Firms On Notice To Comply With 2020 Law

Non-Compliance Means Nasdaq De-Listing In 2024

 
• By Mandy Jackson

Chinese companies publicly traded in the US – including BeiGene, HutchMed and Zai Lab – have three years to switch to accounting firms that can be investigated by the US government, or two years if a pending amendment is adopted.

Stock market chart with US and China flag overlays
US-listed Chinese companies face accounting firm scrutiny • Source: Alamy

The US Securities and Exchange Commission (SEC) has named three China-based biopharmaceutical companies so far that are not in compliance with the Holding Foreign Companies Accountable Act (HFCAA), which became law in 2020. If BeiGene, Ltd., HUTCHMED (China) Limited and Zai Lab Ltd. do not come into compliance with auditing requirements under the HFCAA within three years – or two years under a pending amendment to the law – they will lose their Nasdaq listings.

All three companies trade on stock markets outside of the US as well, but losing access to fundraising through a US offering would be a blow to their growth. BeiGene closed down 12.2% at $161.53 per share on 11 March, while HutchMed dipped 7.5% to $17.09, and Zai Lab fell 16.1% to $29

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