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Two senior Republican lawmakers have urged the US Securities and Exchange Commission (SEC) to consider restricting Chinese companies listed on American stock exchanges from accessing US capital markets, arguing that such measures are necessary to safeguard the country's economy, investors and national security.
According to a press release issued by the House Select Committee on China, the request was made in a letter sent by Select Committee on China Chairman John Moolenaar and Senator Rick Scott to SEC Chairman Paul Atkins. The lawmakers called on the SEC to examine the authorities already available under existing US law to limit the ability of companies identified as linked to China's military from raising funds through US financial markets, the release said. The letter follows the June 8 release of an updated Section 1260H list by the US Department of War, which identified an additional 65 Chinese military companies operating directly or indirectly in the United States. The House Select Committee on China said that the expanded list represents what lawmakers described as the most comprehensive assessment so far of the risks posed by these companies. In the letter, Moolenaar and Scott argued that firms appearing on the Section 1260H list should not be permitted to trade on US exchanges because access to American investment could indirectly support the modernisation of China's People's Liberation Army. They urged the SEC to determine what actions could be taken under its existing authority to address the issue. According to the House Select Committee on China's press release, the lawmakers also pointed to several legal provisions they believe provide the SEC with sufficient authority to act. They cited the Securities Exchange Act of 1934, which empowers the Commission to issue rules governing national securities exchanges, as well as provisions requiring exchanges to protect investors and serve the public interest. They also referred to the SEC's authority to temporarily suspend trading in securities when necessary and highlighted the Holding Foreign Companies Accountable Act, which allows trading suspensions for foreign companies that fail to meet US regulatory and transparency requirements. (ANI)
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