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In the waning months of the Trump administration, the then-president signed a raft of executive orders and new legislation that potentially limit access by Chinese companies to US capital markets. Chief among these actions, the Holding Foreign Companies Accountable Act (“Act”) (signed into law on 18 December 2020) bans public trading in the United States in “covered issuers” audited by firms with offices in non-US jurisdictions where the Public Company Accounting Oversight Board (PCAOB) is unable to inspect. The Act stems from a longstanding issue relating to the ability of the PCAOB to conduct inspections of audit firms in certain countries.

States around the world have adopted measures in reaction to the unprecedented nature and scale of the COVID-19 pandemic to curb the spread of the virus, ensure healthcare systems are not overrun and, more recently, balance reviving the economy and keeping control of the virus. These wide-ranging and far-reaching measures are not without consequences, particularly on foreign investments. 

We highlight examples of measures that may have the potential — and for some have already started — to give rise to claims under investment treaties.

In the waning months of the Trump administration, the then-president signed a raft of executive orders and new legislation that potentially limit access by Chinese companies to US capital markets. Chief among these actions, the Holding Foreign Companies Accountable Act (“Act”) (signed into law on 18 December 2020) bans public trading in the United States in “covered issuers” audited by firms with offices in non-US jurisdictions where the Public Company Accounting Oversight Board (PCAOB) is unable to inspect. The Act stems from a longstanding issue relating to the ability of the PCAOB to conduct inspections of audit firms in certain countries.

In his recent 2021-22 Budget Speech,1 the Financial Secretary (“Financial Secretary”) of the Government of the Hong Kong Special Administrative Region (“Hong Kong Government”) confirmed the intended timing for submission of a legislative proposal to allow foreign investment funds to re-domicile to Hong Kong for registration as an Open-ended Fund Company (OFC). The Financial Secretary also announced subsidies for the costs of setting up a new OFC or re-domiciling of foreign investment funds registering as an OFC in Hong Kong. The latest measures represent further important steps in ongoing enhancements and incentives to promote use of the OFC regime. We discuss the recent developments in more depth below.