The Democratic-run House of Representatives on Wednesday passed a bill that could bar many Chinese companies from listing shares on U.S. exchanges or otherwise raising money from American investors.
The bill aims to make foreign companies let the Public Company Accounting Oversight Board oversee the auditing of their financial records if they want to raise money by selling stocks or bonds to the U.S. public. All U.S. companies and most foreign companies already work with the PCAOB in this way, but Chinese ones MCHI, -0.59% do not.Also see: ‘It’s time for China to blink first,’ says Rep.
The measure is “viewed as an ‘appropriate policy response’ and something the Public Company Accounting Oversight Board has sought for several years now on well-substantiated policy grounds,” said Henrietta Treyz, director of economic policy at Veda Partners, in a note on Wednesday ahead of the House’s vote.
Wednesday’s House approval happened by voice vote and under “suspension of rules,” a common procedure that helps the chamber move more quickly.