WASHINGTON — The Coalition for a Prosperous America (CPA) today urged U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler to implement the Holding Foreign Companies Accountable Act (P.L 116-222) without delay after reports that the Commission has not acted sufficiently to implement the law. The bipartisan legislation passed Congress unanimously and was enacted into law on December 18, 2020.
The Holding Foreign Companies Accountable Act will ensure that Chinese and other foreign companies traded on U.S. exchanges are subject to the same independent audit requirements that apply to American companies. Importantly, the law protects U.S. investors by prohibiting securities of a company from being listed on any of the U.S. securities exchanges if the company has failed to comply with the Public Company Accounting and Oversight Board’s (PCAOB) audits for three consecutive years. It also requires public companies to disclose whether they are owned or controlled by a foreign government, including the Chinese government and Communist Party.
“As the SEC continues to implement the Holding Foreign Companies Accountable Act, we urge the Commission to immediately take action to remove non-compliant Chinese companies from U.S. exchanges,” the letter states. “Accordingly, the SEC should ensure that annual reports filed in 2021, which include financial statements for fiscal year 2020, would be the first eligible non-inspection year for an issuer. Delaying this determination into 2022 would be contrary to Congressional intent and increase the exposure of American investors to fraudulent Chinese companies.”
In May, CPA CEO Michael Stumo wrote in The Washington Times that the “Biden administration should move swiftly to ensure that China’s ruling Communist Party can no longer fund its predatory agenda with Wall Street’s help.”
“The SEC must address the CCP’s exploitation of U.S. capital markets at the expense of American workers and industry, as well as our economic and national security,” the letter continues. “If Chinese companies want access to our markets, they must comply with U.S. laws and regulations for financial transparency and accountability. Accordingly, we urge the SEC to implement the Holding Foreign Companies Accountable Act without further delay.”
Read the full text of the letter.
CPA is the only national, bipartisan organization representing exclusively domestic producers across many sectors of the U.S. economy. CPA believes in working towards a new and positive U.S. trade policy that delivers prosperity and security to America, its citizens, farms, factories, and working people.