- The US Senate approved the Holding Foreign Companies Accountable Act (HFCAA) on Wednesday.
- Non-US companies would be required to certify that they are not owned or controlled by a foreign government.
- The bill was approved in the US Senate without objection.
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The US Senate approved the Holding Foreign Companies Accountable Act (HFCAA) on Wednesday, sweeping legislation that could result in foreign companies that fail to meet several strict criteria being barred from trading on American stock exchanges. The bill was approved without objection.
It comes as US-China tensions increase over the virus pandemic and after the Luckin Coffee accounting scandal.
The bill applies to all foreign companies, but is targeted at China, and follows intense criticism of Beijing by US President Donald Trump and other US politicians.
One of the key provisions of the legislation is that companies would be required to certify that they are not owned or controlled by a foreign government. Non-US companies are also required to back up these statements by an audit conducted by the Public Company Accounting Oversight Board (PCAOB).
The legislation would still need to pass the House of Representatives before being sent to President Trump for final approval. If passed, the law could have a profound impact on foreign companies already listed on US stock exchanges, especially those companies from China.