Two Dozen Republican state financial officers called on the Securities and Exchange Commission (SEC) to ban any foreign company that’s based in a country designated a U.S. adversary, namely China, from receiving Foreign Private Issuer status.
In a letter Friday obtained exclusively by Breitbart News, 24 Republican cosigners write that the change is needed now to protect U.S. investors and national security because most FPIs are now incorporated in the Cayman Islands and headquartered in China. Until recently, most FPIs were headquartered in Canada and the United Kingdom.
The joint letter to SEC Chairman Paul Atkins comes in response to June’s solicitation for public comment over the FPI definition.
The cosigners argue there are “significant risks” from American investment into many Chinese companies that will further the Chinese Communist Party’s (“CCP”) “military-civil fusion” strategy by violating “the disclosure, auditing, or other antifraud provisions of the Securities Exchange Act due to the Chinese government’s actions to prevent transparency.”
Those anti-transparency actions by the CCP warrant the consideration of removing companies based in China – and other countries acting similarly – from being listed on U.S. exchanges at all.
“The state financial officers who penned this letter are standing up for American investors and the national security interests of our country,” O.J. Oleka, CEO of the State Financial Officers Foundation said in a statement. “FPI status allows select issuers to follow loose regulatory guidelines, and so it makes no sense at all to grant this relaxed status to issuers based in countries that are our adversaries, like China.”
In addition to calling for the FPI change, the state financial officers call for immediate steps by the SEC to require issuers remaining on U.S. exchanges to “disclose all material risks related directly to the DFA designation of the country in which the issuer is based.”
“This letter is a matter of common sense and urgency,” Utah Treasurer Marlo Oaks said in a statement. “Adversaries of America should not be allowed to exploit our markets. With China accounting for the largest share of opaque foreign listings, the Chinese Communist Party poses a direct threat to U.S. investors. The SEC must act decisively to protect American citizens.”
SEC — FPI Comment Letter by Breitbart News
The letter also calls for the SEC to take steps to make clear to U.S. investors the risks of investing in Chinese companies.
But most urgently, the SEC should change its FPI definition to ensure American investors aren’t fueling the CCP’s economic war against the U.S.
“The last thing we should do is make it easier for the CCP to wage its war on us,” added Oleka, the State Financial Officers Foundation CEO. “If anything, these issuers should be subject to stricter oversight. The SEC should follow the recommendation of these elected leaders who are putting America first and looking out for our citizens’ futures.”
The full list of signers of the letter are:
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Arizona Treasurer Kimberly Yee
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Indiana Comptroller Elise Nieshalla
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Indiana Treasurer Daniel Elliott
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Kansas Treasurer Steven Johnson
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Kentucky Auditor Allison Ball
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Kentucky Treasurer Mark Metcalf
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Louisiana Treasurer John Fleming
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Mississippi Treasurer David McRae
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Missouri Auditor Scott Fitzpatrick
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Missouri Treasurer Vivek Malek
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Montana Auditor James Brown
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Nebraska Treasurer Tom Briese
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North Dakota Treasurer Thomas Beadle
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Ohio Treasurer Robert Sprague
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Oklahoma Treasurer Todd Russ
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Pennsylvania Treasurer Stacy Garrity
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South Carolina Treasurer Curtis Loftis
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South Dakota Treasurer Josh Haeder
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Utah Auditor Tina Cannon
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Utah Treasurer Marlo Oaks
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West Virginia Treasurer Larry Pack
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Wisconsin Treasurer John Leiber
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Wyoming Auditor Kristi Racines
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Wyoming Treasurer Curt Meier
Bradley Jaye is Deputy Political Editor for Breitbart News. Follow him on X/Twitter and Instagram @BradleyAJaye
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