Major Wall Street executives have come out to express their reservations about a bill that would pressure Chinese companies to comply with U.S. accounting rules.
Executives of Vanguard, Nasdaq and the New York Stock Exchange expressed concerns about the aftereffects from passing the «Holding Foreign Companies Accountable Act» during a panel discussion hosted by the Securities and Exchange Commission (SEC).
SEC chairman Jay Clayon clearly stated the regulator’s supportive position on the legislation as denying access to accounting oversight created an «unloved playing field» for U.S. investors, according to a «Bloomberg» report.
Lackluster Response
In contrast, Wall Street executives expressed reservations about both the legislation itself and its likely outcome. Vanguard principal Rodney Comegys echoed wide anticipation for companies to shift listing from New York to Hong Kong. Nasdaq’s global chief legal and regulatory officer John Zecca called legislation «a very blunt tool», adding that the government already had numerous tools to address the matter.
New York Stock Exchange’s chief commercial officer John Tuttle said the American bourse agreed with the matter «philosophically» but not the tactics involved and their intended objectives.
The bill is now being reviewed by the House after passing the Senate and should it be enacted, Chinese firms could be delisted if they don’t allow examination by the U.S. Public Company Accounting Oversight Board (PCAOB) for three straight years.
