The American upper house unanimously passed new legislation that could further curb the flow of U.S. capital into Chinese firms looking to list.
«The Holding Foreign Companies Accountable Act» will prohibit any firm’s securities to be listed on any exchange in the nation should it fail to comply with U.S. accounting standards three years in a row. In addition, public companies will also be required to disclose whether or not they are owned or controlled by a foreign government.
The bill will come into effect if it passes the House of Representatives – the lower house – and is signed by President Donald Trump.
Target: China
While the bill legally applies to all foreign companies, China is its primary target and this follows a series of other similar moves made by the U.S. to curb capital flows including Nasdaq’s reported decision to tighten listing requirements and Trump’s pullout of Chinese investments from the federal retirement fund.
«There are plenty of markets all over the world open to cheaters, but America can’t afford to be one of them,» said Republican senator and bill sponsor John Kennedy (not related to renowned Kennedy family of Massachusetts) said in a statement alongside Democratic senator and co-sponsor Chris Van Hollen.
«China is on a glidepath to dominance and is cheating at every turn.»
