FRANKFORT, Ky (August 25, 2025) - Kentucky State Treasurer Mark H. Metcalf has joined state financial officers nationwide in urging the U.S. Securities and Exchange Commission (SEC) to close a loophole that allows companies tied to adversarial nations—especially the People’s Republic of China—to evade critical U.S. investor protections.
“Kentuckians’ pensions, public funds, and investments should never be exposed to hidden risks from companies operating under foreign governments hostile to our nation,” Treasurer Metcalf said. “The SEC must act now to protect both our markets and our national security.”
In a letter to SEC Chairman Paul Atkins, the coalition calls for prohibiting companies based in U.S.-designated “foreign adversary” countries from qualifying as Foreign Private Issuers (FPIs). FPI status grants reduced disclosure and audit requirements, which Chinese firms often exploit by incorporating in offshore jurisdictions such as the Cayman Islands while operating under the influence of the Chinese Communist Party (CCP).
The letter urges the SEC to:
- Bar foreign adversary–based companies from FPI status
- Consider delisting those that block U.S. oversight
- Require remaining firms from such countries to fully disclose all related risks
Metcalf noted that Chinese companies have been linked to the CCP’s “military-civil fusion” strategy, longstanding audit obstruction, and corporate structures that obscure financial realities from investors.
“This is about safeguarding the hard-earned money of Kentuckians and Americans everywhere,” Metcalf added.
Read the full letter here: State Financial Officers Urge SEC to Consider Delisting Chinese Companies