A Wall St sign hangs at the New York Stock Exchange at Wall Street on March 23, 2021 in New York City. (ANGELA WEISS / AFP)

New disclosure norms adopted by the United States' securities regulator may prompt the listed Chinese mainland companies return to Chinese bourses, said experts.

The US Securities and Exchange Commission said on Wednesday that it has adopted interim final amendments to implement the disclosure requirements under the Holding Foreign Companies Accountable Act which require firms to establish that they are not owned or controlled by a foreign government entity. These companies are also required to disclose any foreign arrangements and influence in their annual report.

Following the announcement, share prices of some mainland companies listed in the US slumped on Wednesday. Tencent Music Entertainment Group saw its share prices plunge by 27 percent and market value shrink by US$14.4 billion. Likewise, the price of online discounter Vipshop Holdings declined by 21 percent and that of electric carmaker XPeng Inc by 15 percent.

Pang Ming, head of macro and strategic research at China Renaissance Securities (Hong Kong), said regulatory uncertainties were one of the major issues confronting US-listed mainland companies for some time. The mainland's capital market is ready to better embrace new economy companies based on ongoing reforms and the closer ties with the HKSAR

Former US president Donald Trump signed the HFCA Act in December, aiming to prevent the mainland companies from listing on US exchanges if they have not complied with audit requirements from the Public Company Accounting Oversight Board－the organization overseeing the audits of US-based public companies－for three consecutive years.

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Foreign Ministry spokeswoman Hua Chunying stressed at a news conference on Thursday that the Act is basically an unjustified crackdown on US-listed mainland companies through political means. It has seriously distorted the basic market rules that the US has long flaunted and deprived US investors of the opportunity to benefit from the mainland companies' development. The US should create a fair and unbiased business environment for all companies listed in the country, including the mainland companies, she said.

Dong Dengxin, director of the Finance and Securities Institute at the Wuhan University of Science and Technology, said this was the first time that the US government has injected political hues into the capital market, which was aimed at encumbering the mainland's economic development by all means. The Act, which is indeed discriminatory, has not only shut the door for the mainland companies wishing to go public in the US, but also closed the door to the US free market, he said.

Pang Ming, head of macro and strategic research at China Renaissance Securities (Hong Kong), said regulatory uncertainties were one of the major issues confronting US-listed mainland companies for some time. The mainland's capital market is ready to better embrace new economy companies based on ongoing reforms and the closer ties with the Hong Kong Special Administrative Region (HKSAR). As a result, some companies, which are listed or planning to go public in the US, may opt for the HKSAR and the mainland capital markets.

After the HFCA Act was passed in December, 12 US-listed mainland companies have successfully re-listed their shares in the HKSAR as of March 24.

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Analysts of Galaxy Securities said in a report that there are 48 US-listed mainland companies that are eligible for re-listing in the HKSAR, which is about 18 percent of the mainland companies traded on US exchanges. Given the ever-increasing southbound capital－the amount of capital flowing into the stock market in the HKSAR from the mainland investors via stock connect programs－as well as the systemic advantages of the stock exchange in the in the HKSAR, the return of US-listed mainland companies is expected to accelerate.