While the Securities and Exchange Commission (SEC) continues to indicate strict audit standards for Chinese companies listed in the United States, the Communist Party of China (CCP) is working with Wall Street firms to privately launch wholly-owned mutual funds in the Chinese capital. meeting for. Market. Experts believe that Wall Street will continue to be a middleman between China and the United States, while the potential for profits exists.
On September 22, Wall Street investment firm Neuberger Berman was officially approved by the China Securities Regulatory Commission (CSRC), becoming the third wholly foreign-owned mutual fund to operate in China, along with BlackRock and Fidelity.
The deal was promised by the CCP during a private China-US Financial Roundtable (CUFR) held online with Wall Street executives on September 16. Prior to that meeting, SEC Chairman Gary Gensler wrote in a September Wall Street Journal op-ed. 13 that “the SEC may be required to restrict trading in about 270 China-related companies by early 2024” if the US authority is not allowed to audit Chinese audit firms.
Following the SEC’s implementation of the Holding Foreign Companies Accountable Act, Gensler issued similar warnings on July 30 and August 18, which went into effect on December 18 of the previous year. This law prohibits a company from trading its stock unless the Public Company Accounting Oversight Board (PCAOB) is able to oversee its audit. After three years of non-compliance, the law requires US exchanges to delist that company’s stock.
US-based private investment advisor Mike Sun suggested the China-US Financial Roundtable was an act of collusion between Beijing and Wall Street. Capital wants profit, especially in a free economy, and Wall Street players will essentially act as intermediaries to their advantage, he said.
A similar observation was made by Professor Frank Xie of the University of North Carolina School of Business. In an interview with The Epoch Times, Zee said the private roundtable was not the first time Wall Street executives and CCP regulators had allegedly colluded. Wall Street has been financially supporting the CCP for years and whitewashing it in the West, he said.
CCP Opens Foreign Owned Mutual Funds
This year marked the beginning of CCP’s efforts to expedite the approval of applications by wholly foreign-owned mutual funds. Prior to the Neuberger Berman deal, China’s CSRC approved BlackRock on June 18 and Fidelity on August 6, and this is just the beginning.
The inauguration is part of a trade deal signed with Washington in early 2020. The CSRC website shows that applications from several more US investment firms are pending. These include VanEck, Alliance Bernstein and Schröders. JPMorgan Asset Management, a subsidiary of JPMorgan, also got permission to increase its stake in its joint venture company to acquire a wholly owned stake.
Patrick Liu, head of Neuberger Berman’s China division, said becoming one of the first batch of foreign mutual fund firms to start business in China is a milestone in their China business expansion. He added that no global asset management firm should overlook the tremendous opportunities offered by the Chinese market.
Neuberger Berman currently manages over $433 billion in assets. Since 2008, the firm has participated in various restricted private equity funds, investment advisory services and Qualified Domestic Limited Partnership pilot business in China.
China-US Financial Roundtable
The 35 participants at the fifth private CUFR on 16 September included top Chinese regulatory officials, such as CSRC Vice President Fang Jinghai; Yi Gang, governor of the People’s Bank of China; Guo Shuqing, President China Banking and Insurance Regulatory Commission; and the third largest hedge fund on Wall Street, leaders of top Wall Street firms such as Goldman Sachs, BlackRock, Fidelity, Blackstone and Citadel.
Mike Sun said Wall Street giants have coveted China’s financial market for more than 30 years, and that the CCP would allow Wall Street to act as a middleman with the US government for China’s multi-trillion-dollar deal. Using the financial market.
Sun believes that Beijing does not think that the SEC’s intense regulation of Chinese stocks means they should be delisted from the market and that the SEC is only working to protect the interests of US investors in accordance with US laws and regulations. Is. But on issues such as information security, which Beijing considers a threat to its national security, the CCP will not give in easily.
The Chinese media did not report on the private CUFR of three and a half hours.
Sun believes Beijing’s message is that it supports Chinese stocks going public in the United States but is in control of it. Based on its approval, it will decide whether to list domestically or abroad, including in Hong Kong.
He said the bigwigs of Wall Street would act as intermediaries for their own interests and that international accounting firms, led by the “Big Four” accounting firms, would also play a role.
Frank Zee also believes that the big investment banks on Wall Street are acting as lobbyists for the CCP. He alleged that some large Western accounting firms deliberately turn a blind eye to false accounting and misrepresentation by CCP.
US tightens regulation of Chinese stocks
On September 14, the SEC’s Gensler insisted, “Whether in California, the Cayman Islands or China, all companies looking to raise money in the deep and liquid US capital markets must play by US rules.”
The PCAOB adopted a new framework on September 22 that would require more disclosure by companies that used non-U.S. auditing firms to help PCAOB enforce the Foreign Company Accountability Act. This framework will become effective after the approval of the SEC.
Ellen Wang contributed to this article.
Translated by Kathy Yin-Garten.
The views expressed in this article are those of the author and do not necessarily reflect the views of The Epoch Times.
This News Originally From – The Epoch Times