Two decades after its accession to the World Trade Organization, China still uses its intertwined public and private sectors to serve the Communist Party’s mercantilist goals. Many Chinese businesses are listed on U.S. stock exchanges, but Beijing’s intransigence ensures that American investors often don’t get a true picture of those companies’ financial health.

In December 2018, the Securities and Exchange Commission and the Public Company Accounting Oversight Board issued a joint warning to investors about the challenges American regulators face when attempting to conduct oversight of U.S.-listed companies based in China and Hong Kong. While the PCAOB regularly inspects audits of U.S.-listed firms, Beijing consistently challenges their efforts. Chinese law requires that financial records remain in China, and Beijing restricts access to accounting information, citing national security and state secrecy.

Chinese practices raise real risks of fraud. They also undermine the fair and transparent financial reporting at the heart of American capital markets. In their December 2018 joint statement, the SEC and PCAOB acknowledged that “for investors—both U.S. and non-U.S. investors—a U.S. listing carries with it the assumption that U.S. rules and regulatory oversight apply.” When it comes to Chinese companies, that simply isn’t true.

The U.S.-China Economic and Security Review Commission identified 156 Chinese companies, including 11 state-owned-enterprises, that are listed on America’s three largest exchanges. Their combined market capitalization of $1.2 trillion means that significant American capital is exposed to the risk created by China’s lack of economic transparency.

The U.S. can no longer accept a two-tiered system, which is why I’m introducing the Equitable Act—an acronym for Ensuring Quality Information and Transparency for Abroad-Based Listings on our Exchanges—to ensure that all companies on American stock exchanges are subject to the same standards and regulations. When the Equitable Act becomes law, foreign companies that don’t make their audits available for PCAOB review will be subject to increased disclosure requirements. If they don’t comply within three years they’ll be delisted from American stock exchanges.