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US bill aimed at certain Chinese companies forces them to delist from US Securities exchanges

• Foreign companies will have to prove that they are not government owned or controlled
• 156 Chinese companies on the ‘watch-list’

17th August, 2020, London

The S. 945 - Holding Foreign Companies Accountable Act, which was passed by The US Senate in May this year and aims to require certain issuers of securities in the US to establish that they are not owned or controlled by a foreign government, has moved down the legislative priority list.  However, Kevin Carter, Founder of EMQQ – The Emerging Market Internet & Ecommerce UCITS ETF, says that with the upcoming US Presidential elections and growing tension with China, it should resurface and become a bigger priority in the coming months

Kevin Carter, CEO of EMQQ said: “Public Chinese companies that do not adhere to U.S. accounting rules or disclose government ownership or control, especially by the Chinese Government or Communist Party, run the risk of being de-listed from U.S. securities exchanges if the bill becomes law.  With the US Presidential elections coming up later this year, and growing tension between the US and China, the chances of this happening are increasing.

“However, investors should welcome this as it could flush-out several ‘bad-actors’ in the space and help validate the rest.” 

There are some 156 Chinese companies listed in the US being reviewed.  11 of these are Chinese State Owned, and approximately 100 are ‘penny stocks’, with most trading on the NASDAQ Global Market or NASDAQ Capital Market.

The Emerging Market Internet & Ecommerce UCITS ETF, which is distributed on the HANetf white-label platform, delivers exposure to an index of leading companies driving the growth of online consumption in the developing world. To be included, companies must derive more than half their profits from Ecommerce or internet activities, including search engines, online retailers, social networks, online video, online gaming, e-payment systems and online travel.  Unlike most emerging market indices the companies included do not need to be listed locally. 

The EMQQ UCITS ETF delivered 9.08% in July 2020, 44.72% YTD and 59.93% in one year.[1]  Past performance is no guarantee of future performance. When you trade ETFs your capital is at risk.

EMQQ is listed on London Stock Exchange, Borsa Italiana, XETRA and SIX and has a TER of 86bps.