The Securities and Exchange Commission has the power to kick companies off Wall Street if they fail to allow U.S. regulators to review their financial audits for three consecutive years.
On Monday, Alibaba said it would monitor market developments and “strive to maintain its listing status on both the NYSE and the Hong Kong Stock Exchange.”
The company announced last week that it would seek an initial listing on the Hong Kong Stock Exchange, in what many analysts see as preparation for a potential loss of direct access to the US capital market.
Alibaba currently has a secondary listing on the Hong Kong Stock Exchange.
“Hong Kong’s primary listing status gives Chinese ADRs (American Depositary Shares) the opportunity to diversify listing risk and retain access to the public stock market” if they are forced to leave the United States, analysts at Goldman Sachs said in a recent report. a week.
Alibaba’s smooth transition from listing status could also “pave the way” for many other Chinese ADRs to make a similar transition, Citi analysts said.
– Julia Horowitz of CNN Business contributed to this report.