Washington DC: Due to changes in reporting procedures, Chinese companies listed on the US Stock Exchange will need to disclose the risks posed by the Chinese government’s interference with their operations.

This follows Chinese regulators last week launching an investigation into Didi, a ride-hailing service giant. China’s announcement came a few days after the $ 4.4 billion listing in New York, losing 25% of its share price.

Recently, Chinese authorities have tightened regulations on other US-listed Chinese companies.

In addition, China has announced that tutoring companies such as the New York-listed TAL Education Group (TAL.N) and Gaotu Techedu Inc (GOTU.N) need to become non-profit organizations.

Some US policy makers are concerned that Chinese companies are violating the US requirement for listed companies to disclose various risks to their businesses to investors.

SEC Commissioner Allison Lee said, “Public companies are a significant risk to China-based publishers that may be associated with the regulatory environment and potential actions by the Chinese government,” according to Reuters. We must disclose the risks. “

The Wall Street Journal previously reported that Diddy had been warned by regulators to postpone its initial public offering and address cybersecurity.

Lee has not disclosed whether Diddy’s investigation was initiated because the SEC did not provide proper disclosure.

“We should always focus on providing investors with sufficient information on important risks, such as those recently seen in relation to China,” Lee said.

Last year, Congress passed a bill to exclude Chinese companies from US exchanges unless they comply with US auditing standards.

Senator Bill Hagati, a member of the Senate Banking Commission, told Reuters that “U.S. regulators protect U.S. investors and workers from non-market behavior that burns U.S. investors. You have to make sure that it is done. “

“This includes implementing compliance with Public Company Accounting Oversight Commission audit requirements and investigating whether there was sufficient disclosure of the serious potential investment risks associated with such a centralized economy. “I will,” said Hagerty.