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 selloff of many Chinese stocks trading in the U.S. 

Last month, the SEC announced it would halt new IPOs from Chinese companies until they bolster disclosures. The decision followed an onslaught of fury on Capitol Hill that was triggered by Didi Global Inc.’s New York listing in July. 

Right after Didi sold stock, China surprised investors by announcing it was scrutinizing the ride-sharing company and would restrict it from adding new customers. Didi shares tanked, prompting U.S. lawmakers to demand that the SEC investigate whether the company knew what steps China was considering and failed to disclose those risks to investors. 

Gensler declined to discuss Didi.  

Among the companies with U.S. listings that might have to reveal more about Beijing pressures are some of China’s biggest, including Alibaba Group Holding Ltd. and Baidu Inc. 

Gensler declined to say what consequences businesses would face for not complying with his plan, but he noted that the SEC has a range of powers at its disposal. He also wouldn’t comment on how long the agency’s current pause on new IPOs from China would last. 

“It’s really up to the issuers,” Gensler said.  

This article was provided by Bloomberg News.