The U.S. Securities and Exchange Commission has proposed the guidelines it will use to implement a Trump administration law that authorizes it to delist Chinese stocks.

The Holding Foreign Companies Accountable Act (HFCAA) is not aimed exclusively at China but according to legal experts, its most consequential aspects will impact Chinese issuers with securities listed and traded in the United States.

China currently does not allow the U.S. Public Company Accounting Oversight Board to examine the audits of firms whose shares trade in America, citing national security concerns.

In an interim final rule released on Wednesday, the SEC said it would apply the HFCAA to an issuer that files “an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction” and that the PCAOB “is unable to inspect or investigate completely because of a position taken by an authority in that jurisdiction.”

Any such issuer must submit documentation establishing that it is not owned or controlled by a governmental entity in the foreign jurisdiction and also disclose its audit arrangements, and any governmental influence on them, to the SEC.

Under the HFCAA, companies that fail to comply with American auditing standards for three years in a row can be delisted from U.S. exchanges.

As Reuters reports, “The new rules come amid simmering tensions between the United States and China, with bipartisan support for a tough U.S. approach.” Former President Trump signed the HFCAA into law in December.

The SEC had 90 days after passage of the law to submit an interim rule. It is now seeking public comments on a process for identifying companies that fail to meet the standards.

On news of the guidelines, shares in several Chinese companies fell in trading Wednesday, including Nio, Xpeng, and Tencent Music Entertainment. “While nothing seems to be set in stone right now … it appears that until trade tensions simmer down, this piece of legislation poses a real risk to [Chinese] companies,” InvestorPlace said.

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