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President Trump Will Remove Chinese Companies From The Us Stock Market

Many Chinese businesses are at risk of being excluded from the US stock market due to failure to comply with auditing rules.

According to Forbes, President Donald Trump recently succeeded in forcing the US $ 50 billion retirement fund to stop investing in companies listed on the Chinese stock exchange.

Recently, the US President issued strict requirements for Chinese stocks listed on the NYSE and Nasdaq, forcing these businesses to be removed from the US stock market if they do not comply with the next rules. anti-fraud team.

President Trump told FOX Business recently that the United States is strictly applying the Sarbanes-Oxley Code (SOX) to Chinese businesses. President Trump predicts that big Chinese companies like Alibaba (BABA code) may have to leave the Hong Kong or London stock exchanges.

The Code (SOX) has been in place since 2002, when investors of companies were severely damaged by serious accounting fraud scandals. This law requires businesses listed on the stock market to be transparent in their financial statements. 

The fact that more than 100 Chinese companies are listed on the US stock exchange do not allow third parties to conduct financial audits, which made President Trump more resilient in the decision to remove these stocks from the two major US stock exchanges. 

Recently, Chinese stocks have been outspoken against Washington's actions. Under section 4040 of the Code requires the Executive Board and the auditor to report fully on the financial performance of the business, but the Chinese government told the U.S. Securities and Exchange Commission (SE) this is confidential information. 

So how can Chinese stocks be allowed to list on US exchanges without complying with SOX. Chinese enterprises account for the majority of the list of companies where the Public Enterprise Accounting Supervision Council (PCAOB) has difficulty in financial auditing. Obviously there is a barrier to the transparency of financial information that exists in Chinese businesses listed on the US stock exchange.

Over the past 18 years, a number of businesses have complied with the SOX Code, some companies have chosen to delist due to these anti-fraud regulations. However, Chinese businesses are the opposite, they are still not complying. 

Despite the constructive conversations of the SEC and PCAOB with the Chinese authorities for many years now, it seems that the results have not been as expected.

Republican Senator Marco Rubio said:
"The President has complete right to examine how Chinese businesses exploit the US capital market and run the company in accordance with US laws and regulations. If Chinese companies want to invest in the United States, they must comply with US laws and regulations."
On May 12, the National Center for Policy and Legal Affairs (NLPC) sent a letter asking BlackRock BLK Chairman and CEO Larry Fink to divest from 137 Chinese companies currently listed on the exchange. American stock exchange. 

Including 11 companies that own at least 30% of the Chinese government's capital and all businesses are "fully influenced and controlled by the CCP," the center made such information in a statement. press report.

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