Senate passes bill that could ban some Chinese companies from U.S. stock exchanges
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The Senate has unanimously passed a bill that could force some foreign companies off American stock exchanges. Any foreign company could be affected, but senators were thinking a lot about China.
It’s bipartisan legislation written by Sen. John Kennedy, R-La., and Sen. Chris Van Hollen, D-Md. They say China is cheating and misleading American investors.
The idea behind the bill is to compel all foreign companies to allow American regulators access to their books, to ensure their accounting is honest and sincere. This is the same standard American companies must meet to be listed on stock exchanges.
The problem is that there are more than 200 foreign firms which are not meeting that standard. Many are Chinese. And they have a combined market capitalization of nearly $2 trillion.
Their stocks are traded, but American investors don’t have a full picture of what’s going on inside those companies.
If the bill passes the House and is signed into law, whether or not we see 200 companies immediately delisted depends on how companies cooperate.
There’s a three-year provision in the bill, so if American regulators haven’t had access to a company’s records for three consecutive years, then the Securities and Exchange Commission can prohibit trading of that company’s shares.
Shas Das, who between 2011 and 2015 was the chief U.S. negotiator with Chinese regulators, told Marketplace Thursday morning that he doesn’t know “that the Chinese companies would effectively capitulate.”
“And I say that because they have other jurisdictions that would be more than happy to be venues for their listing,” Das said.
He says Hong Kong’s stock exchange is one likely destination for these companies, rather than more transparency with U.S. regulators.
The bill also requires firms to disclose if they’re owned or controlled by a foreign government. This has long been a big issue for American leaders — to what extent Chinese firms answer to that country’s government.
COVID-19 Economy FAQs
New COVID-19 cases and deaths in the U.S. are on the rise. How are Americans reacting?
Johns Hopkins University reports the seven-day average of new cases hit 68,767 on Sunday — a record — eclipsing the previous record hit in late July during the second, summer wave of infection. A funny thing is happening with consumers though: Even as COVID-19 cases rise, Americans don’t appear to be shying away from stepping indoors to shop or eat or exercise. Morning Consult asked consumers how comfortable they feel going out to eat, to the shopping mall or on a vacation. And their willingness has been rising. Surveys find consumers’ attitudes vary by age and income, and by political affiliation, said Chris Jackson, who heads up polling at Ipsos.
How many people are flying? Has traveled picked up?
Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.
How are Americans feeling about their finances?
Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.
Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.
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