(Yicai Global) March 31 -- China’s securities regulator said the issue of whether Chinese firms listed in the United States will actually be delisted in the next two years will ultimately depend on the wisdom and original intention of both parties, after the US added more to a list at risk of being removed from US stock markets.

Their removal will depend on the progress and results of the audit and regulatory cooperation between the two countries, the China Securities Regulatory Commission said in a press release published today, which cited an official in charge of its international affairs department.

The US Securities and Exchange Commission yesterday added Baidu, Futu Holdings, iQiyi, CASI Pharmaceuticals and Nocera to the provisional list of issuers identified under the Holding Foreign Companies Accountable Act. They are the third group of US-listed Chinese stocks put on the provisional list this month.

The five are required to provide the SEC with evidence that they are not eligible for delisting by April 20, the US securities regulator said. Otherwise, they will be placed on the conclusive list of issuers identified under the HFCAA.

Shares of online brokerage Futu Holdings [NASDAQ: FUTU] closed down 2.9 percent in New York at USD37.40 each, while tech giant Baidu [NASDAQ: BIDU] ended 2.6 percent lower at USD143.83.

The CRSC said it was standard procedure for the US regulator to enforce the HFCAA, citing what it learned from the SEC.

CSRC Chairman Yi Huiman and SEC Chairman Gary Gensler have spoken by video call three times since last August to discuss and resolve the remaining issues regarding the audit and regulatory cooperation between China and the US, the CSRC noted.

Talks have been progressing smoothly and will continue as both parties are willing to resolve the differences and problems, the CSRC added.

The HFCCA was officially signed into law in December 2020. It imposes additional disclosure requirements for foreign firms listing in the United States. Issuers now also need to submit financial reports with audit opinions from institutional auditors recognized by the US Public Company Accounting Oversight Board.

Editor: Peter Thomas