BATON ROUGE, La. — Louisiana Treasurer John Fleming joined 23 state financial officers in urging the U.S. Securities and Exchange Commission to strengthen rules governing foreign companies listed in U.S. markets, citing risks tied to Chinese firms.
In a letter to SEC Chairman Paul Atkins, the group called for reforms to the Foreign Private Issuer designation, which allows overseas companies to qualify for reduced disclosure requirements. The treasurers argued that Chinese firms, often incorporated in jurisdictions such as the Cayman Islands, use the designation to avoid U.S. regulatory standards while exposing investors to fraud and national security concerns.
“The SEC must take decisive action to ensure that U.S. capital is protected and that our markets remain strong, safe, and free from foreign exploitation,” Fleming said.
The letter outlined three priorities: requiring greater transparency for companies linked to adversarial nations, closing loopholes that allow Chinese firms to benefit from relaxed disclosure rules, and protecting U.S. investors from opaque financial structures.
“It makes no sense to grant relaxed status to issuers based in countries that are our adversaries, like China,” said O.J. Oleka, chief executive of the State Financial Officers Foundation. “This is about protecting taxpayers and investors from unnecessary risks.”
The request follows similar calls from state officials and federal lawmakers earlier this year to consider delisting Chinese firms that fail to comply with American auditing and reporting requirements.
“By taking this action, the SEC will be prioritizing the safety of American investors and our national security interests, while recognizing the dangerous threat posed by the CCP,” Fleming said.