SEC Demands Chinese Firms Bolster Risk Disclosures for Investors

The SEC said companies should be particularly careful to make clear disclosures around any shell companies they use to list in the U.S.

(Bloomberg) — Chinese companies trading in the U.S. must disclose more about the risks they can pose for investors, according to new guidance from the Securities and Exchange Commission.

The businesses need to make more specific and prominent disclosures to comply with federal securities laws, the SEC’s unit in charge of reviewing corporate filings said Monday. The agency also said that special purpose acquisition companies, or SPACs, should disclose whether their sponsors or a majority of executives are based in China, or whether a merger target is located there.

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