ASA Outlines Policy Recommendations to End China’s Fraud on American Financial Markets

It’s time to cut off their access to our capital markets and stop funding China’s human-rights abuses, global military operations, cyber-attacks on Americans, and fraudulent CCP-controlled companies.

WASHINGTON – Ahead of today’s Senate Banking Committee hearing regarding the crisis in Hong Kong and a review of U.S. policy tools, the American Securities Association (ASA) outlined several policy recommendations to end China’s fraud on American financial markets and investors.

“The Chinese Communist Party’s recent aggression trampling on the autonomy of Hong Kong is just the latest salvo in China’s violation of international norms,” said ASA CEO Chris Iacovella. “While the Committee is right to discuss sanctions, it must also address China’s exploitation of our capital markets and the many hardworking American labor unions, pension funds and retirement savers who have lost millions investing in fraudulent Chinese companies. It’s time to cut off their access to our capital markets and stop funding China’s human-rights abuses, global military operations, cyber-attacks on Americans, and fraudulent CCP-controlled companies.”

To end China’s fraud on our markets, the Committee should require the SEC to: (1) terminate the 2013 agreement that gives Chinese companies a “free pass” from the Sarbanes-Oxley rules enacted to protect investors in the wake of the Enron and WorldCom frauds; (2) deregister every Chinese company that doesn’t meet the same company-specific disclosure, audit, and reporting standards as U.S. companies; and (3) close the “passive index loophole,” which allows index funds to sell shares of an index holding Chinese companies listed on Chinese stock exchanges that are not subject to any U.S. laws and regulations (i.e. China A-Shares). 

Earlier this week, ASA CEO Iacovella penned an op-ed for RealClearPolitics calling on policymakers to do more to end China’s fraud on our markets. Allowing China to continue to deceive them undermines America’s national security, economic security, and our values.

###

ASA’s regional financial services companies work in communities across the country to create jobs, grow the economy, and increase prosperity for all Americans. The ASA exclusively represents the capital market and private client interests of its members and seeks to promote free market principles making it easier to access financial advice and capital. ASA members help Americans save for retirement, provide Main Street businesses with capital to grow, and advise hardworking Americans how to create and preserve wealth. For the latest updates follow @AmerSecurities and learn more at http://americansecurities.org/.