NINGUNO Volver >
Memorandum on Protecting United States Investors from Significant Risks from Chinese Companies
Citar: elDial.com - CC66E0
Copyright 2024 - elDial.com - editorial albrematica - Tucumán 1440 (1050) - Ciudad Autónoma de Buenos Aires - Argentina
Texto Completo
Memorandum
on Protecting United States Investors from Significant Risks from
Chinese
Companies.
Issued
on: June 4, 2020
SHARE:
ALL
NEWS
MEMORANDUM
FOR
THE
SECRETARY OF THE TREASURY
THE
ASSISTANT TO THE PRESIDENT FOR ECONOMIC POLICY
THE
ASSISTANT TO THE PRESIDENT FOR NATIONAL SECURITY AFFAIRS
SUBJECT:
Protecting United States Investors from Significant Risks from Chinese
Companies
By
the authority vested in me as President by the Constitution and the
laws of the
United States of America, and to ensure the integrity of United States
financial markets, it is hereby ordered as follows:
Section
1. Purpose. United States capital markets have long
been the
driving engine of the global economy. The combination of
robust
disclosure requirements, clear and effective regulation, fair
enforcement, and
a free market system have made the United States the premier
jurisdiction in
the world for raising capital. Investors trust the financial
information
provided by United States public companies and know that fraudulent
activities
will promptly be addressed by United States financial
regulators. As a
result, companies from around the world want to list on United States
stock
exchanges and raise money in the United States.
Chinese
companies are no exception. For decades, Chinese companies
have availed
themselves of the benefits of United States financial markets, and
capital
raised in the United States has helped fuel China’s rapid economic
growth. While China reaps advantages from American markets,
however, the
Chinese government has consistently prevented Chinese companies and
companies
with significant operations in China from abiding by the investor
protections
that apply to all companies listing on United States stock
exchanges. It
is both wrong and dangerous for China to benefit from our capital
markets
without complying with critical protections that investors in those
markets
rightfully expect and deserve. China’s actions to thwart our
transparency
laws raise significant risks for investors. The time has come
to take
firm action in an orderly fashion to put an end to the practice that
has
tacitly permitted companies with significant Chinese operations to
flout
protections United States law requires for investors in United States
markets.
For
example, the Chinese government refuses to allow audit firms registered
with
the Public Company Accounting Oversight Board (PCAOB) to provide audit
working
papers to the PCAOB so that it can fulfill its statutory obligation to
inspect
audit work and enforce audit standards. Recently, the Chinese
government
enacted a statute that expressly prevents audit firms from providing
this
information without the prior consent of Chinese financial
regulators.
Preventing the PCAOB from complying with its statutory mandate means
that
investors cannot have confidence in the financial reports of audited
companies
and creates significant risks to investors in the securities listed on
United
States stock exchanges.
The
Securities and Exchange Commission (SEC) and PCAOB have pressed China
for years
to allow companies to provide greater transparency in financial
information, to
no avail. Concerns about China’s efforts to thwart
transparency
requirements suggest significant risks even for investors in Chinese
companies
listed on United States stock exchanges. Such companies may
not provide
appropriate and safe investments for investors, including pension
funds, which
owe fiduciary duties to their beneficiaries.
For
these reasons, we must take firm, orderly action to end the Chinese
practice of
flouting American transparency requirements without negatively
affecting
American investors and financial markets. We must ensure that
laws
providing protections for investors in American financial markets are
fully
enforced for companies listed on United States stock exchanges.
Sec.
2. President’s Working Group on Financial Markets.
Executive Order
12631 of March 18, 1988 (Working Group on Financial Markets),
established the
President’s Working Group on Financial Markets (PWG), which is chaired
by the
Secretary of the Treasury, or his designee, and includes the Chairman
of the
Board of Governors of the Federal Reserve System, the Chairman of the
SEC, and
the Chairman of the Commodity Futures Trading Commission, or their
designees. The Secretary of the Treasury shall convene the
PWG to discuss
the risks to investors described in section 1 of this memorandum and
other
risks to American investors and financial markets posed by the Chinese
government’s failure to uphold its international commitments to
transparency
and accountability and its refusal to permit companies to comply with
United
States law.
Sec.
3. Report. Within 60 days of the date of this
memorandum, the PWG
shall submit to the President, through the Assistant to the President
for
National Security Affairs and the Assistant to the President for
Economic
Policy, a report that includes:
(a)
Recommendations for actions the executive branch may take to protect
investors
in United States financial markets from the failure of the Chinese
government
to allow PCAOB-registered audit firms to comply with United States
securities
laws and investor protections;
(b)
Recommendations for actions the SEC or PCAOB should take, including
inspection
or enforcement actions, with respect to PCAOB-registered audit firms
that fail
to provide requested audit working papers or otherwise fail to comply
with
United States securities laws; and
(c)
Recommendations for additional actions the SEC or any other Federal
agency or
department should take as a means to protect investors in Chinese
companies, or
companies from other countries that do not comply with United States
securities
laws and investor protections, including initiating a notice of
proposed
rulemaking that would set new listing rules or governance
safeguards. Any
such actions should take into account the impact on investors and
ensure the
continued fair and orderly operation of United States financial markets.
Sec.
4. General Provisions. (a) Nothing in
this memorandum shall
be construed to impair or otherwise affect:
(i)
the authority granted by law to an executive department or agency, or
the head
thereof; or
(ii)
the functions of the Director of the Office of Management and Budget
relating
to budgetary, administrative, or legislative proposals.
(b)
This memorandum shall be implemented consistent with applicable law and
subject
to the availability of appropriations.
(c)
This memorandum is not intended to, and does not, create any right or
benefit,
substantive or procedural, enforceable at law or in equity by any party
against
the United States, its departments, agencies, or entities, its
officers,
employees, or agents, or any other person.
(d)
The Secretary of the Treasury is authorized and directed to publish
this
memorandum in the Federal Register.
Citar: elDial.com - CC66E0
Copyright 2024 - elDial.com - editorial albrematica - Tucumán 1440 (1050) - Ciudad Autónoma de Buenos Aires - Argentina
¿PROBASTE NUESTROS SERVICIOS?
Formá parte de elDial.com y obtené acceso a novedades jurídicas, nuevos fallos y sentencias, miles de modelos de escritos, doctrinas y legislación actualizada. Además, con tu suscripción accedes a muchos beneficios y descuentos en las mejores editoriales, libros y cursos.