EQUITABLE Act

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The Ensuring Quality Information and Transparency for Abroad-Based Listings on our Exchanges Act (EQUITABLE Act) is a proposed bill to amend the Sarbanes-Oxley Act to require the U.S. Securities and Exchange Commission to de-list foreign companies traded on U.S. stock exchanges that do not comply with oversight and audit rules. [1] Under the bipartisan bill, foreign companies traded on U.S. stock exchanges that refused to allow the Public Company Accounting Oversight Board to inspect their financial records would face de-listing. [2] [3] [4] The bill was introduced in 2019 by Marco Rubio and co-sponsored by Bob Menendez, Tom Cotton, and Kirsten Gillibrand. The bill is a response to the lack of financial transparency of Chinese companies listed on U.S. stock exchanges, often resulting from reverse mergers, and defrauding of investors. [5] [6] [7]

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References

  1. Chen, Wang (December 4, 2019). "EQUITABLE Act: Background and Potential Application". Columbia Business Law Review . Archived from the original on December 22, 2019. Retrieved 2019-12-22.
  2. Robertson, Benjamin (June 6, 2019). "Latest U.S. Salvo Against Chinese Firms Could Benefit Hong Kong". Bloomberg News . Archived from the original on July 2, 2019. Retrieved September 24, 2019.
  3. Kynge, James (September 5, 2019). "Trade war sucks in US-listed Chinese stocks". The Nikkei . Archived from the original on September 24, 2019. Retrieved September 24, 2019.
  4. "Public Companies that are Audit Clients of PCAOB-Registered Firms from Non-U.S. Jurisdictions where the PCAOB is Denied Access to Conduct Inspections". Public Company Accounting Oversight Board . Archived from the original on 2019-10-16. Retrieved 2019-10-16.
  5. Poletti, Therese (June 26, 2019). "D.C. is finally paying attention to scary Chinese stocks, but Wall Street may pay the consequences". MarketWatch . Archived from the original on September 25, 2019. Retrieved September 25, 2019.
  6. Leonard, Jenny; Donnan, Shawn (September 27, 2019). "White House Weighs Limits on U.S. Portfolio Flows Into China". Bloomberg News . Archived from the original on September 27, 2019. Retrieved September 27, 2019.
  7. Stevenson, Alexandra; Wong, Edward (2020-04-30). "Chinese Coffee Chain's Scandal Renews U.S. Calls for Oversight". The New York Times . ISSN   0362-4331. Archived from the original on 2020-05-01. Retrieved 2020-05-01.