By Stephen Nakrosis

 

The U.S. Securities and Exchange Commission on Thursday said it adopted amendments which finalize rules regarding submission and disclosure requirements in the Holding Foreign Companies Accountable Act.

The rules pertain to registrants which "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 is unable to inspect or investigate," known as Commission-Identified Issuers, the SEC said.

According to the SEC, those Commission-Identified Issuers 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."

"If you want to issue public securities in the U.S., the firms that audit your books have to be subject to inspection by the PCAOB," Gary Gensler, chair of the SEC, said.

"The Commission and the PCAOB will continue to work together to ensure that the auditors of foreign companies accessing U.S. capital markets play by our rules. We hope foreign governments will, working with the PCAOB, take action to make that possible," he added.

Congress passed the Holding Foreign Companies Accountable Act in 2020 as an amendment to the Sarbanes-Oxley Act of 2002. Under the law, certain issuers must disclose to the SEC information about foreign jurisdictions that prevent PCAOB from performing inspections.

The SEC said it would identify Commission-Identified Issuers for fiscal years beginning after Dec. 18, 2020.

 

Write to Stephen Nakrosis at stephen.nakrosis@wsj.com

 

(END) Dow Jones Newswires

December 02, 2021 14:06 ET (19:06 GMT)

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