Chinese Companies Could Be Delisted From US Stock Markets

NYSE
  • The “Holding Foreign Companies Accountable Act” could easily be put for final approval, as it had already passed by the Senate.
  • Furthermore, on the US Stock Exchange, Chinese groups will have to reveal whether one or more of their board members are members of the Communist Party of China.
  • In the case of de-listing in the United States, a limited number of these companies are also on the Asian markets and could fall back to these stock exchanges.
  • Visit The Financial Today’s homepage for more stories.

Presented by  etoro

NEW YORK — On Wednesday, the House of Representatives approved a bill that could close US equity and money markets to Chinese companies.

The “Holding Foreign Companies Accountable Act” could easily be put for final approval, as it had already passed by the Senate.

The bill proposed in 2019 by Republican Senator John Kennedy of Louisiana will mandate that international firms traded on US stock markets meet with the US Securities and Exchange Commission’s accounting standards.

The standard is already complied with by several international firms, but Chinese companies do not.

Furthermore, on the US Stock Exchange, Chinese groups will have to reveal whether one or more of their board members are members of the Communist Party of China.

In early October, 217 Chinese firms were listed on US stock exchanges, valued at a total of $2.2 trillion based on share prices, according to estimates from a congressional commission.

In the case of de-listing in the United States, a limited number of these companies are also on the Asian markets and could fall back to these stock exchanges.

E-commerce colossus Alibaba, which had the highest all-time initial public offering on the New York Stock Exchange in 2014, raising $25 billion, is one of the heavyweights on the list.

Its rival, JD.com, is listed on the Nasdaq, a tech-rich benchmark, and the Hong Kong exchange.

The bill approved by Congress is part of the Washington-Beijing economic and political duel and aims at obscure accounting methods utilized by Chinese companies that list securities on US exchanges for trade.

A proposal identical to the measure that passed the House of Representatives on Wednesday has already been drafted by the SEC.

The SEC had already formulated, in November, a proposal close to the text adopted by the House on Wednesday.

Presented by  etoro

Image by Andrew Smith. AFP contributed to this story.

Total
0
Shares

Leave a Reply

Previous Post
Vaccine

US Anticipates 100 Million People Vaccinated by February

Next Post
Tokyo Stock Exchange

Most Asian Markets up on Vaccines, Eyes on US Stimulus Talks

Related Posts