Bill that could delist Chinese companies from U.S. stock exchanges to see ‘swift passage’ in House, analyst says

- Advertisement -
- Advertisement -
- Advertisement -
- Advertisement -

Momentum is building for the Democratic-run House to approve sweeping legislation that could ultimately bar many Chinese companies from listing their shares on U.S. stock exchanges or otherwise raising money from American investors.

Democratic Rep. Brad Sherman of California introduced a House version of the Holding Foreign Companies Accountable Act Wednesday night, after the bill passed the Republican-controlled Senate earlier in the day with unanimous support.

The bill would require that foreign companies let the Public Company Accounting Oversight Board oversee the auditing of their financial records if they want to raise money by selling stocks or bonds to the American public. All U.S. companies and most foreign firms already work with the PCAOB in this way, but Chinese firms do not.

Henrietta Treyz, director of economic policy at Veda Partners, said investors should “expect swift passage” of the bill “likely before the end of the month” in a Thursday note to clients. “From there, it will go to President Trump’s desk, where he will sign it into law, likely within the next few weeks.”

There was a possibility that the House Financial Services Committee would amend the Senate bill, but that didn’t happen and it suggests broad support for the bill, Treyz added.

Sherman cited the example of Luckin Coffee IncLK, -27.30% , which revealed in April that it had fabricated 2019 sales figures and was being investigated by Chinese securities regulators. The company’s Nasdaq-listed stock has plunged from a high of $50 in mid-January to trade under $3 on Thursday. “Had this legislation already been signed into law, U.S. investors in Luckin Coffee would have avoided billions of dollars in losses,” the congressman said in a news release.

Other analysts see the bill potentially moving more slowly.

“There are three possible choices for how the House will proceed­­­: Quickly pass the bill as written, delay consideration until later in the summer, or pass an amended version which would then necessitate either Senate approval or a conference committee,” wrote Clayton Allen, senior vice president of trade, policy and geopolitical risk at Height Capital Markets. Allen added that President Donald Trump may prefer some delay for the bill, in order to reserve it as leverage over Beijing in future negotiations.

Democratic House Speaker Nancy Pelosi of California said Thursday afternoon on Bloomberg Television that she has asked House committees to review the legislation. “I take second place to no one in the Congress, House or Senate, in my criticisms of China’s trade policies vis-à-vis the United States over decades,” she said. “But the fact is we have to have a relationship with China.”

This article was originally published on

Home of Science
Follow me

- Advertisement -




Levi Strauss CEO Chip Bergh: Coronavirus pandemic will separate retail’s winners and losers

KEY POINTS Levi Strauss, which has been around for 167 years, is going to use COVID-19 “as an opportunity to come out stronger on the...

Kenzie Burke — 23 year old only eats fruit until noon and here is her explanation why:

“Fruit passes through our system rapidly. It does not stay in the stomach for very long and actually digests as it is going through...

Important Business Letter Format

Important Business Letter FormatBusiness letter format is an essential part of writing a business letter. To be successful, you need to have a...

How Much Does Amazon Prime Cost?

How Much Does Amazon Prime Cost?Have you heard of Amazon Prime? I have to admit, I've never heard of it. What it is,...

Olivia Coleman – What is it About?

For the majority of her stardom, Oprah Winfrey was a true anomaly. She was an unconventional and unique character, one who made people smile...
Home of Science
Follow me