RWR Advisory Group president and CEO Roger Robinson explains how Chinese companies might react to the new Senate thrift fund bill, calling it a ‘monumental decision.’
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After the U.S. Senate passed a bill boosting oversight of companies based in China and other nations that could lead to their removal from American stock exchanges this week, many people wondered if this will cause Chinese companies to leave American markets.
The legislation's focus on Chinese stocks stems from pre-coronavirus concerns that Chinese firms listed on America’s exchanges are not subject to the same investor protection rules and accounting standards as U.S. companies, which leaves small retail investors facing a higher risk of fraud.
"It was a monumental decision," RWR Advisory Group's president and CEO Roger Robinson told FOX Business' during "Maria Bartiromo's Wall Street" on Friday about the Senate bill. "This has been an area … that's been largely neglected for 20 years. This has been off the radar screen for a couple of decades, and it came back on with a vengeance with the thrift plan."
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The bill, which passed on Wednesday, says that if the Public Company Accounting Oversight Board, a nonprofit established by Congress after the WorldCom and Enron scandals of the early 2000s, is denied access to a foreign stock issuer's books for three years, the Securities and Exchange Commission will prohibit trading in the shares on U.S. exchanges.
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