A trader is working on the floor of the New York Stock Exchange (NYSE) after the opening bell of the trading session in New York, USA, March 13, 2020.
Lucas Jackson | Reuters
GUANGZHOU, China – Major Chinese dual-list technology transactions traded in Hong Kong hit on Thursday amid fears that some companies could be removed from the list in the US
Shares in Hong Kong of US-listed Chinese technology stocks fell sharply. Alibaba fell more than 4% at 13:04 Hong Kong time, Baidu fell 8%, JD.com fell 4%, and NetEase fell nearly 3%.
It comes a day after the Securities and Exchange Commission (SEC) passed a law called the Holding Foreign Companies Accountable Act, which was passed by former President Donald Trump’s administration.
Some companies identified by the SEC will require an audit of a US surveillance dog. These companies will need to provide certain documents to establish that they are not owned or controlled by a government entity under foreign jurisdiction.
Chinese companies will have to appoint each board member who is an official of the Chinese Communist Party, the SEC said Wednesday.
The US regulator could stop trading securities that do not comply with its rules.
Chinese technology companies are not only under pressure from the threat of deregistration abroad, but also concerns about stricter regulation at home. Beijing has sought to reign in the power of technology giants and set new rules in areas from financial technology to e-commerce.
While the Chinese government’s crackdown began with billionaire Jack Ma’s empire, including the suspension of the Ant Group’s initial mega public offering, there are signs that Beijing’s goals could extend beyond the Ant.
Reuters reported this week that Tencent founder Pony Ma met with Chinese antitrust officials this month. Tencent is listed only in Hong Kong, and its shares were over 2% lower around 13:17, Hong Kong time.