Abstract
This paper discusses the Holding Foreign Companies Accountable Act (HFCAA) as a response to the long-standing regulatory disparities between U.S. and foreign firms listed on U.S. stock exchanges, with particular regard to foreign firms from China. The HFCAA requires that any firms listed on U.S. stock exchanges be subject to inspections by the Public Company Accounting Oversight Board (PCAOB) or face delisting, aiming to eliminate historic regulatory disparities. The paper begins by highlighting the historic regulatory gap in oversight resulting from China’s lack of cooperation with U.S. regulators and continues by discussing the investor harm from various scandals that could have been mitigated by addressing the regulatory gap. While the HFCAA successfully prompted unprecedented cooperation from Chinese regulators, the legislation carries risks, including potential delistings, unintended economic consequences, and questions regarding its political overtones. The paper concludes that while flawed, the HFCAA represents a constructive step toward investor protection and regulatory equality, calling for continued vigilance and legislative refinement to sustain its effectiveness.
Recommended Citation
Robert Ruelas,
A New Era of Accountability? The Holding Foreign Companies Accountable Act’s Pursuit of Regulatory Equality,
45
Nw. J. Int'l L. & Bus.
79
(2024).
https://scholarlycommons.law.northwestern.edu/njilb/vol45/iss1/3
Included in
Agency Commons, Banking and Finance Law Commons, Consumer Protection Law Commons, International Law Commons, Legislation Commons, Securities Law Commons, Transnational Law Commons
