The SEC has the power to kick companies off Wall Street if they fail to allow US watchdogs to inspect their financial audits for three straight 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.”
Last week, the company announced it would seek a primary listing on the Hong Kong stock exchange, a move seen by many analysts as preparing for a potential loss of direct access to the US capital market.
Currently, Alibaba has a secondary listing on the Hong Kong stock exchange.
“A primary listing status in Hong Kong gives Chinese ADRs (American Depository Shares) an optionality to diversify their listing risk and retain access to the public equity market” if they are forced to leave the United States, said Goldman Sachs analysts in a report last week
Alibaba’s smooth transition of listing status could also “set the path” for many more Chinese ADRs to pursue a similar switch, Citi analysts said separately.
— CNN Business’ Julia Horowitz contributed to this report.