ASA Welcomes SEC’s Opening Move to End CCP’s Exploitation of American Markets

WASHINGTON – The American Securities Association (ASA) today commended the Securities and Exchange Commission’s (SEC) unanimous vote to advance a concept release on the definition of a "foreign private issuer" (FPI) that would help end the Chinese Communist Party's (CCP) use of the Variable Interest Entity (VIE) structure to access American capital.

"With today’s concept release on foreign private issuers, Chairman Atkins' SEC is signaling to the CCP that its use of the nefarious VIE structure to manipulate our markets and put American investors at risk is coming to an end," said ASA President and CEO Chris Iacovella.

“Changing the FPI definition is an important first step to making certain the SEC’s rules do not put U.S companies at a competitive disadvantage to foreign companies, especially those in China, and that America’s retirees, savers, and working families receive the exact same disclosure, voting rights, and legal recourse they expect when they invest in an American company.”

In April, Iacovella testified at a joint hearing with the Senate Special Committee on Aging and the House Select Committee on the Chinese Communist Party (CCP) titled “Financial Aggression: How the Chinese Communist Party Exploits American Retirees and Undermines National Security." In his testimony, he called on policymakers to end the CCP's exploitation of the VIE structure and close the passive index loophole.

Following the hearing, Senator Rick Scott (R-FL) led a bicameral letter to the SEC echoing these policy concerns and urging action.

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The American Securities Association (ASA) represents the retail and institutional capital markets interests of regional financial services firms who provide Main Street businesses with access to capital and advise hardworking Americans how to create and preserve wealth. ASA’s mission is to promote trust and confidence among investors, facilitate capital formation, and support efficient and competitively balanced capital markets. This mission advances financial independence, stimulates job creation, and increases prosperity. The ASA has a geographically diverse membership of almost one hundred members that spans the Heartland, Southwest, Southeast, Atlantic, and Pacific Northwest regions of the United States.