This doesn’t affect just Chinese companies; it applies to any company controlled by a foreign government. So the title isn’t fully accurate.
The bill is very short, but here’s the relevant section (§2B):
> (B) require each covered issuer identified under subparagraph (A) to, in accordance with the rules issued by the Commission under paragraph (4), submit to the Commission documentation that establishes that the covered issuer is not owned or controlled by a governmental entity in the foreign jurisdiction described in subparagraph (A)(i).
Maybe it’s just me, but this is very vague. What about US based subsidiaries? I do also find it peculiar how it explicitly mentions “foreign jurisdiction”; which means companies doing the business of the NSA are exempt.
It sounds like it's trying to address the points made in "The China Hustle" [1] where investors aren't able to assess Chinese companies listed on US markets.
"If a company can’t show that it is not under such control OR the Public Company Accounting Oversight Board isn’t able to audit the company for three consecutive years to determine that it is not under the control of a foreign government, the company’s securities would be banned from the exchanges."
I have some tiny stake in some Chinese railroads listed on NY exchange. Not only it got decimated due to COVID, but now I will be forced to sell because of this? Bummer. :D
The bill is very short, but here’s the relevant section (§2B):
> (B) require each covered issuer identified under subparagraph (A) to, in accordance with the rules issued by the Commission under paragraph (4), submit to the Commission documentation that establishes that the covered issuer is not owned or controlled by a governmental entity in the foreign jurisdiction described in subparagraph (A)(i).
Maybe it’s just me, but this is very vague. What about US based subsidiaries? I do also find it peculiar how it explicitly mentions “foreign jurisdiction”; which means companies doing the business of the NSA are exempt.
For those wanting to read the bill, it’s S.945: https://www.congress.gov/bill/116th-congress/senate-bill/945...