WASHINGTON, D.C.—Benjamin Schiffrin, Director of Securities Policy for Better Markets, issued the following statement on today’s filing of Better Markets’ comment letter to the Securities and Exchange Commission (SEC) in response to its concept release on foreign private issuers:

“U.S. investors are not getting the information that they need about foreign companies. That’s because the regulatory regime governing ‘foreign private issuers’ is not working at intended. Companies that qualify as foreign private issuers need not comply with many of the requirements of our securities laws. The SEC’s concept release acknowledges that the premise for this treatment of foreign private issuers is that these issuers should be subject to meaningful disclosure requirements in their home country. Because it now appears that many companies that qualify as foreign private issuers are not subject to meaningful disclosure requirements in their jurisdiction of incorporation or jurisdiction of headquarters, the SEC should revise the foreign private issuer definition to ensure it functions as intended.

“The fact that numerous companies that qualify as foreign private issuers are now headquartered in China and incorporated in the Cayman Islands means that, without the application of our securities laws to these companies, U.S. investors do not have the information that they need to make informed investment decisions. It also means that the treatment foreign private issuers receive is less necessary to avoid duplicative regulatory regimes. The Commission should revise the foreign private issuer definition so that the accommodations for foreign private issuers are available only to issuers who are otherwise subject to regulatory requirements that leave U.S. investors in these companies protected.

“A revised definition of foreign private issuer is necessary not only to protect U.S. investors in foreign companies but to protect the competitiveness of U.S companies. U.S. companies that access our capital markets must do so in compliance with our securities laws. Unless their home country subjects them to a comparable regulatory regime, foreign companies that seek access to U.S. investors should do so on equal terms to domestic companies.”

The comment letter is available here.

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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.