ASA CEO Iacovella Testifies at Congressional Hearing on China

WASHINGTON – American Securities Association (ASA) President and CEO Chris Iacovella testified at a joint hearing with the Senate Special Committee on Aging and the House Select Committee on the Chinese Communist Party (CCP) titled “Financial Aggression: How the Chinese Communist Party Exploits American Retirees and Undermines National Security". In his testimony, Iacovella describes the risks the CCP poses to American investors and senior savings, what can be done about it, and why a bipartisan Congress must act. To WATCH his opening statement, click here.

“For the last eight years, the ASA has been the only financial services trade association calling on Congress and the federal government to take action to protect America’s investors and our country from the economic and national security threats posed by the CCP,” Iacovella said in his testimony.

In his testimony, Iacovella highlighted how the CCP exploits the U.S. capital markets. “A regulatory loophole, I call the ‘passive index loophole’, allows non-U.S. companies listed on non- U.S. stock exchanges to be included in an index fund and sold to American investors. This allows the non-U.S. company to avoid the company-specific disclosure, financial reporting, and audit requirements that American companies must comply with to sell stock to American investors.”

Iacovella also highlighted how CCP-sponsored scammers are targeting American seniors and retirement savers. “The only way to try to combat the sophistication of this ever-changing criminal activity going forward is to promote an open, honest and trustworthy partnership between the private sector and government.”

Iacovella’s testimony outlined additional policy recommendations including:

·    Prohibiting the listing of any Chinese company on a U.S. exchange that uses the variable interest entities scheme;

·    Urging Congress to pass the FIGHT China Act, the No China in Index Funds Act, and the Protecting American Capital Act; and

·    Examining how much revenue can be raised by imposing a foreign adversary capital gains tax on the realized proceeds of any type of public or private investment made in China, in a Chinese company, or in a registered investment fund that owns Chinese securities.

To read Iacovella’s full testimony, click here. To WATCH his opening statement, click here.

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The American Securities Association (ASA) represents the retail and institutional capital markets interests of regional financial services firms who provide Main Street businesses with access to capital and advise hardworking Americans how to create and preserve wealth. ASA’s mission is to promote trust and confidence among investors, facilitate capital formation, and support efficient and competitively balanced capital markets. This mission advances financial independence, stimulates job creation, and increases prosperity. The ASA has a geographically diverse membership of almost one hundred members that spans the Heartland, Southwest, Southeast, Atlantic, and Pacific Northwest regions of the United States.