SEC Issues Holding Foreign Companies Accountable Act Interim Rules

On March 18, 2021, the SEC adopted interim final amendments to implement the Congressionally-mandated disclosure and submission requirements of the Holding Foreign Companies Accountable Act (HFCA Act). Enacted on December 18, 2020, the HFCA Act reflects Congressional concern that securities were trading in US markets on the basis of audit reports issued by registered public accounting firms with offices for which local authorities prohibited complete inspection by the Public Company Accounting Oversight Board (PCAOB), particularly in the People's Republic of China.

The amendments will apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm with an office or branch that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in that jurisdiction. The amendments require the submission by such