The U.S. House of Representatives voted this week to advance the Holding Foreign Companies Accountable Act through Congress. The act requires Chinese companies to delist from major U.S. exchanges if they fail to comply with audit requirements of the Public Companies Accounting Oversight Board (PCAOB) within three years. Andrew Karolyi, professor of finance at the Cornell SC Johnson College of Business and a decades-long expert on international listings of stocks, has written about the phenomenon of foreign firms leaving U.S. equity markets. He says the legislation may be part of a broader push by the U.S. to take a more assertive stance toward Beijing, but he also argues that there may be serious unintended negative consequences for investors as well as U.S. markets.
