The Council of Institutional Investors ("CII") expressed support for two bills before the Investor Protection, Entrepreneurship and Capital Markets Subcommittee of the House Financial Services Committee: the "Accelerating Holding Foreign Companies Accountable Act" and the "Stock Exchange Improvement Act." CII requested that its letter be included in the public record in connection with the Subcommittee's recent hearing titled, "Taking Stock of China, Inc.: Examining Risks to Investors and the U.S. Posed by Foreign Issuers in U.S. Market."
In the letter addressed to the Subcommittee's Chair and Ranking Member, CII stated that the Accelerating Act would expedite trading prohibitions for issuers retaining public accounting firms not subject to inspection by the Public Company Accounting Oversight Board. CII added that the Act would require Chinese-based firm compliance within two, instead of three, consecutive years. CII also noted that the PCAOB has not fully inspected Chinese-based auditing firms for over 13 years.
In addition, CII expressed support for the Improvement Act, a governance and disclosure bill that would amend the Exchange Act to "improve the governance of multi-class stock companies, to require issuers to make annual diversity disclosures, and for other purposes." The bill would limit non-proportional voting power and establish board diversity listing standards for multi-class stock companies.
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