Securities And Exchange Commission Issues Disclosure Guidance For China-Based Issuers

On November 23, 2020, the Division of Corporation Finance (the “Division”) of the U.S. Securities and Exchange Commission (“SEC”) issued guidance (the “Guidance”) that (i) highlights certain risks (and their implications to U.S. investors) associated with investments in China-based Issuers¹ and (ii) summarizes the Division's views on the enhanced disclosures that China-based Issuers should make regarding such risks. The Guidance follows the passage of the Holding Foreign Companies Accountable Act (the “Senate Bill”) by the U.S. Senate in May 2020 and, more recently, the July 2020 recommendations from the President's Working Group on Financial Markets, both of which are intended to facilitate increased U.S. regulatory scrutiny of China-based Issuers.