(Bloomberg) -- The Securities and Exchange Commission will demand that the more than 250 Chinese companies trading in U.S. markets better inform investors about political and regulatory risks, expanding a dictate that it recently imposed for firms seeking initial public offerings.
SEC Chair Gary Gensler said in a Tuesday interview that he envisions the enhanced disclosures being included in corporations’ annual reports beginning early next year. The new details would likely include information about the businesses’ shell-company structures, he added.
Investors need “full and fair disclosure,” Gensler said. “Are the disclosures really fit for the times about the regulatory risks, the various political risks?”
The heightened requirement marks the SEC’s latest response to Beijing’s clampdown on private industry. The moves, including enhanced security reviews of companies pursuing foreign listings, have shocked Wall Street and triggered a deep sell-off of many Chinese stocks trading in the U.S.
Last month, Gensler said the SEC would halt new IPOs from Chinese companies until they bolster disclosures.
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