SEC Amends Rules Related to Submission and Disclosure Requirements Under the Holding Foreign Companies Accountable Act

The SEC has issued a final rule, Holding Foreign Companies Accountable Act Disclosure. The final rule applies to “registrants the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the Public Company Accounting Oversight Board (PCAOB) is unable to inspect or investigate (Commission-Identified Issuers).”

Under the final rule, such an issuer must “submit documentation to the SEC establishing that, if true, it is not owned or controlled by a governmental entity in the public accounting firm’s foreign jurisdiction.” Further, if such an issuer qualifies as a “foreign issuer,” as that term is defined in Rule 3b-4 of the Securities Exchange Act of 1934, it must “provide certain additional disclosures in its annual report for itself and any of its consolidated foreign operating entities.”

For more information, see the press release and fact sheet on the SEC’s Web site.