Amid deteriorating relations with China, US President Donald Trump has issued a memorandum to protect American investors from Chinese companies.
Amid deteriorating relations with China, US President Donald Trump has issued a memorandum to protect American investors from Chinese companies. In this, he has said that it is wrong and dangerous for China to profit from the US capital markets without following the security measures.
In a memorandum issued to Secretary of State Mike Pompeo and other top members of the national security leadership, the president said, “For decades, Chinese companies have taken advantage of the US financial markets and the capital they have raised in the US has made China economic. Contributes to development ‘. He further said that while China benefits from the US markets, the government there prohibits Chinese companies and large-scale companies operating in China from following regulations designed to protect investors, all listed on the US stock exchanges Apply to companies.
President Trump says that ‘China’s action to thwart US transparency laws is a serious threat to investors. So now the time has come to take some drastic steps so that the interests of American investors can be protected ‘. According to Trump, China has made a habit of violating security laws designed to protect investors in US markets. For example, the Chinese government does not allow audit firms registered with the Public Company Accounting Oversight Board (PCAOB) to provide audit working paper boards. Beijing recently enacted a law that explicitly prohibits audit firms from providing this information without the prior consent of Chinese financial regulators.
The president further said, preventing PCAOB from complying with its statutory mandate meant that investors could not rely on the financial reports of audited companies and this posed a serious risk to investors in securities listed on the US stock exchanges. The Securities and Exchange Commission (SEC) and PCAOB have been pressuring China for years to allow companies to have more transparency in financial information, but no hearing is being held.
China’s efforts to thwart transparency requirements pose serious risks to investors of Chinese companies listed on the US stock exchanges. Expressing concern over this, Donald Trump said, “Such companies cannot provide fair and safe investments for investors, including pension funds.” Therefore, we must take strict and systematic action to end this Chinese practice of flouting American transparency requirements without negatively affecting American investors and financial markets.
Trump also said that we should ensure that the laws providing protection to investors in the US financial markets are fully applicable to companies listed on the US stock exchanges. In his memorandum, the President has asked the Treasury Secretary to discuss with the Working Group of the President of Financial Markets. The group will discuss the risks to investors and financial markets, arising due to the Chinese government’s alleged failure to maintain its international commitments to transparency and accountability and its refusal to allow companies to comply with US law. Has happened. The group has been asked to file its memorandum in the next 60 days.