Foreign investors in the US should not believe they can evade national security investigations by regulators by keeping their investments under 10 per cent, according to a senior Democratic lawmaker.

Barney Frank, the chairman of the House financial services committee, said that new regulations being drafted by the US Treasury should clarify a misconception that investments under 10 per cent were automatically considered passive and did not merit review by the inter-agency panel that investigates cross-border deals on national security grounds.