US Senate passes bill to boost oversight and delist Chinese companies from exchanges
- A Republican sponsor of the legislation says aim is to stop Chinese firms from ‘cheating’ on US stock markets
- Move comes amid rising tensions between Washington and Beijing over trade and the coronavirus pandemic
The legislation, which was supported by lawmakers of both parties and was passed without objection, requires companies seeking access to US stock markets to establish that “they are not owned or controlled by a foreign government”.
The bill also asks foreign companies to submit audits for inspection by the Public Company Accounting Oversight Board, the non-profit body that oversees audits of all US companies in public markets. Failure to provide the information for three consecutive years would lead to the delisting of a company’s shares.
The bill can be applied to any foreign company seeking to raise capital in the US. But lawmakers, including Senator John Kennedy, a Louisiana Republican who is one of the bill’s sponsors, have said that the legislation was aimed at China and intended “to stop them from cheating” on US exchanges.
“China is on a glide path to dominance and is cheating at every turn. It’s asinine that we’re giving Chinese companies the opportunity to exploit hard-working Americans – people who put their retirement and college savings in our exchanges,” Kennedy said. “There are plenty of markets all over the world open to cheaters, but America can’t afford to be one of them.”