China's regulator expressed its discontent with a new bill that would tighten listing rules in the U.S., describing the move as a politicization of securities rules.
Certain provisions in the bill directly targeted China rather than professional considerations, the CSRC said in a statement after the U.S. Senate unanimously passed «The Holding Foreign Companies Accountable Act». The bill will come into effect if it passes the House of Representatives – the lower house – and is signed by President Donald Trump.
«We firmly oppose such politicization of securities regulation,» the CSRC said in an issued statement. «It is hoped that relevant parties in the United States will uphold the professional spirit, go with the Chinese side, and handle the issue of regulatory cooperation in accordance with the principles of marketization and rule of law.»
The bill prohibits 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.
U.S. Interests Harmed?
According to the CSRC, the interest of both parties in the U.S. will be be harmed by the new bill as it will prevent foreign companies from opting to list in the U.S., adding that market confidence would take a hit and «international investors will make their own wise choices in accordance to their own needs».
But U.S. officials beg to differ.
«For too long, Chinese companies have disregarded U.S. reporting standards, misleading our investors,” said Democratic senator and the bill’s co-sponsor Chris Van Hollen in a statement issued last week. «Publicly listed companies should all be held to the same standards, and this bill makes commonsense changes to level the playing field and give investors the transparency they need to make informed decisions.»
