House committee scrutinizes investments in flagged Chinese companies (IGNITES)

A Congressional House committee is pursuing details on investments by numerous mutual funds and ETFs in certain “flagged” Chinese companies. The 27 Chinese companies named are considered national security risks and are acting directly against the interests of the US, according to the chairs of the House Select Committee on the Chinese Communist Party. The select committee is seeking information on the investment process for certain funds offered by at least one large money manager, with other requests likely to follow. FrontLine Compliance Founder and President Amy Lynch cites the investigation as a fact-finding mission to gather data to determine if there are potential risks. She comments that currently, any changes to the investments in the Chinese companies would only be made voluntarily by the money managers or as determined by their funds’ board of directors. Ms. Lynch adds that this would likely remain the case absent a new rule created by the SEC or a specific executive order issued by the White House that covers mutual funds and ETFs. See IGNITES (subscription required), “57 Shops Invested in Flagged Chinese Companies”