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The anatomy of Holding Foreign Companies Accountable Act (HFCAA): a panacea or a double-edge sword?

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Version 2 2023-06-12, 09:55
Version 1 2023-06-10, 00:17
journal contribution
posted on 2023-06-12, 09:55 authored by Qingxiu BuQingxiu Bu
Key points: -Accurate financial statements are critical to investors in making informed decisions and vital to the overall well-being of the US capital market. -For cross-listed and multi-jurisdictional businesses, the current regulatory frameworks fail to create governance equivalency between foreign and US domestic issuers that are listed in the USA. -The US Holding Foreign Companies Accountable Act (HFCAA) seeks to level the playing field. -Companies that use accounting firms which cannot be inspected by the Public Company Accounting Oversight Board for three consecutive years risk being de-listed from US securities exchanges and also becoming subject to a prohibition in over-the-counter trading in their stock. -Behind the statutory response in HFCAA are intertwined tensions between stakeholders and sovereigns. -The key to addressing the current imbalances will be to strike a balance between maintaining the US stock markets’ open to high-quality foreign issuers and enabling US investors to have access to reliable financial information. -It remains uncertain whether the HFCAA will reshape the governance landscape geoeconomically.

History

Publication status

  • Published

File Version

  • Published version

Journal

Capital Markets Law Journal

ISSN

1750-7219

Publisher

Oxford University Press

Issue

4

Volume

16

Page range

503-527

Department affiliated with

  • Law Publications

Full text available

  • Yes

Peer reviewed?

  • Yes

Legacy Posted Date

2021-07-05

First Open Access (FOA) Date

2021-09-06

First Compliant Deposit (FCD) Date

2021-07-05

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