Washinton, May 21: On Wednesday, the US Senate approved a bill that could lead to the delisting of Chinese companies from U.S. stock exchanges. According to a Bloomberg report, Senator John Kennedy submitted the Holding Foreign Companies Accountable Act for unanimous consent and the bill was approved without objection. The Chinese stocks, including Alibaba and Baidu were trading down on the back of this news.

The bill would require companies to certify that they are not under the control of a foreign government. As per the bill, if a company can’t show that it is not under such control or the Public Company Accounting Oversight Board, or PCAOB, isn’t able to audit the company for three consecutive years to determine that it is not under the control of a foreign government, the company’s securities would be banned from the exchanges. US-China Trade War: US Blocks More Chinese Tech Firms On National Security Concerns Ahead of Donald Trump and Xi Jinping Meet.

The new legislation could deter Chinese companies from not only listing shares on U.S. exchanges but also raising money from U.S. investors. In the next course of action, the bill will next head to the Democratic-controlled House of Representatives for consideration.

(The above story first appeared on LatestLY on May 21, 2020 02:17 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).