15 U.S.C. § 7214a — Additional disclosure

Page 2327 TITLE 15—COMMERCE AND TRADE § 7214a port on the financial statement of the cov- ered issuer that is included in a report de- scribed in paragraph (1)(A) filed by the cov- ered issuer, retains a registered public ac- counting firm that has a branch or office that— (i) is located in a foreign jurisdiction; and (ii) the Board is unable to inspect or in- vestigate completely because of a position taken by an authority in a foreign juris- diction, as determined by the Board; and (B) require each covered issuer identified under subparagraph (A) to, in accordance with the rules issued by the Commission under paragraph (4), submit to the Commis- sion documentation that establishes that the covered issuer is not owned or controlled by a governmental entity in the foreign ju- risdiction described in subparagraph (A)(i). (3) Trading prohibition after 2 years of non-in- spections (A) In general If the Commission determines that a cov- ered issuer has 2 consecutive non-inspection years, the Commission shall prohibit the se- curities of the covered issuer from being traded— (i) on a national securities exchange; or (ii) through any other method that is within the jurisdiction of the Commission to regulate, including through the method of trading that is commonly referred to as the ‘‘over-the-counter’’ trading of securi- ties. (B) Removal of initial prohibition If, after the Commission imposes a prohi- bition on a covered issuer under subpara- graph (A), the covered issuer certifies to the Commission that the covered issuer has re- tained a registered public accounting firm that the Board has inspected under this sec- tion to the satisfaction of the Commission, the Commission shall end that prohibition. (C) Recurrence of non-inspection years If, after the Commission ends a prohibition under subparagraph (B) or (D) with respect to a covered issuer, the Commission deter- mines that the covered issuer has a non-in- spection year, the Commission shall prohibit the securities of the covered issuer from being traded— (i) on a national securities exchange; or (ii) through any other method that is within the jurisdiction of the Commission to regulate, including through the method of trading that is commonly referred to as the ‘‘over-the-counter’’ trading of securi- ties. (D) Removal of subsequent prohibition If, after the end of the 5-year period begin- ning on the date on which the Commission imposes a prohibition on a covered issuer under subparagraph (C), the covered issuer certifies to the Commission that the covered issuer will retain a registered public ac- counting firm that the Board is able to in- spect under this section, the Commission shall end that prohibition. (4) Rules Not later than 90 days after December 18, 2020, the Commission shall issue rules that es- tablish the manner and form in which a cov- ered issuer shall make a submission required under paragraph (2)(B). (Pub. L. 107–204, title I, § 104, July 30, 2002, 116 Stat. 757; Pub. L. 111–203, title IX, § 982(e)(1), July 21, 2010, 124 Stat. 1929; Pub. L. 116–222, § 2, Dec. 18, 2020, 134 Stat. 1063; Pub. L. 117–328, div. AA, title III, § 301, Dec. 29, 2022, 136 Stat. 5536.) Editorial Notes REFERENCES IN TEXT This Act, referred to in subsecs. (a)(1), (b), and (c), is Pub. L. 107–204, July 30, 2002, 116 Stat. 745, known as the Sarbanes-Oxley Act of 2002. For complete classification of this Act to the Code, see Tables. AMENDMENTS 2022—Subsec. (i)(2)(A)(ii). Pub. L. 117–328, § 301(1), sub- stituted ‘‘a foreign jurisdiction’’ for ‘‘the foreign juris- diction described in clause (i)’’. Subsec. (i)(3). Pub. L. 117–328, § 301(2)(A), substituted ‘‘2’’ for ‘‘3’’ in heading. Subsec. (i)(3)(A). Pub. L. 117–328, § 301(2)(B), sub- stituted ‘‘2’’ for ‘‘3’’. 2020—Subsec. (i). Pub. L. 116–222 added subsec. (i). 2010—Subsec. (a). Pub. L. 111–203 designated existing provisions as par. (1), inserted heading, and added par. (2). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Amendment by Pub. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an Effective Date note under section 5301 of Title 12, Banks and Banking. § 7214a. Additional disclosure (a) Definitions In this section— (1) the term ‘‘audit report’’ has the meaning given the term in section 7201(a) of this title; (2) the term ‘‘Commission’’ means the Secu- rities and Exchange Commission; (3) the term ‘‘covered form’’— (A) means— (i) the form described in section 249.310 of title 17, Code of Federal Regulations, or any successor regulation; and (ii) the form described in section 249.220f of title 17, Code of Federal Regulations, or any successor regulation; and (B) includes a form that— (i) is the equivalent of, or substantially similar to, the form described in clause (i) or (ii) of subparagraph (A); and (ii) a foreign issuer files with the Com- mission under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) or rules issued under that Act; (4) the terms ‘‘covered issuer’’ and ‘‘non-in- spection year’’ have the meanings given the terms in subsection (i)(1) of section 7214 of this title, as added by section 2 of this Act; and (5) the term ‘‘foreign issuer’’ has the mean- ing given the term in section 240.3b–4 of title 17, Code of Federal Regulations, or any suc- cessor regulation. Page 2328 TITLE 15—COMMERCE AND TRADE § 7215 (b) Requirement Each covered issuer that is a foreign issuer and for which, during a non-inspection year with respect to the covered issuer, a registered public accounting firm described in subsection (i)(2)(A) of section 7214 of this title, as added by section 2 of this Act, has prepared an audit report shall disclose in each covered form filed by that issuer that covers such a non-inspection year— (1) that, during the period covered by the covered form, such a registered public ac- counting firm has prepared an audit report for the issuer; (2) the percentage of the shares of the issuer owned by governmental entities in the foreign jurisdiction in which the issuer is incor- porated or otherwise organized; (3) whether governmental entities in the ap- plicable foreign jurisdiction with respect to that registered public accounting firm have a controlling financial interest with respect to the issuer; (4) the name of each official of the Chinese Communist Party who is a member of the board of directors of— (A) the issuer; or (B) the operating entity with respect to the issuer; and (5) whether the articles of incorporation of the issuer (or equivalent organizing document) contains any charter of the Chinese Com- munist Party, including the text of any such charter. (Pub. L. 116–222, § 3, Dec. 18, 2020, 134 Stat. 1064.) Editorial Notes REFERENCES IN TEXT The Securities Exchange Act of 1934, referred to in subsec. (a)(3)(B)(ii), is act June 6, 1934, ch. 404, 48 Stat. 881, which is classified principally to chapter 2B (§ 78a et seq.) of this title. For complete classification of this Act to the Code, see section 78a of this title and Tables. Section 2 of this Act, referred to in subsecs. (a)(4) and (b), means section 2 of Pub. L. 116–222. § 7215. Investigations and disciplinary pro- ceedings (a) In general The Board shall establish, by rule, subject to the requirements of this section, fair procedures for the investigation and disciplining of reg- istered public accounting firms and associated persons of such firms. (b) Investigations (1) Authority In accordance with the rules of the Board, the Board may conduct an investigation of any act or practice, or omission to act, by a registered public accounting firm, any associ- ated person of such firm, or both, that may violate any provision of this Act, the rules of the Board, the provisions of the securities laws relating to the preparation and issuance of audit reports and the obligations and liabil- ities of accountants with respect thereto, in- cluding the rules of the Commission issued under this Act, or professional standards, re- gardless of how the act, practice, or omission is brought to the attention of the Board. (2) Testimony and document production In addition to such other actions as the Board determines to be necessary or appro- priate, the rules of the Board may— (A) require the testimony of the firm or of any person associated with a registered pub- lic accounting firm, with respect to any matter that the Board considers relevant or material to an investigation; (B) require the production of audit work papers and any other document or informa- tion in the possession of a registered public accounting firm or any associated person thereof, wherever domiciled, that the Board considers relevant or material to the inves- tigation, and may inspect the books and records of such firm or associated person to verify the accuracy of any documents or in- formation supplied; (C) request the testimony of, and produc- tion of any document in the possession of, any other person, including any client of a registered public accounting firm that the Board considers relevant or material to an investigation under this section, with appro- priate notice, subject to the needs of the in- vestigation, as permitted under the rules of the Board; and (D) provide for procedures to seek issuance by the Commission, in a manner established by the Commission, of a subpoena to require the testimony of, and production of any doc- ument in the possession of, any person, in- cluding any client of a registered public ac- counting firm, that the Board considers rel- evant or material to an investigation under this section. (3) Noncooperation with investigations (A) In general If a registered public accounting firm or any associated person thereof refuses to tes- tify, produce documents, or otherwise co- operate with the Board in connection with an investigation under this section, the Board may— (i) suspend or bar such person from being associated with a registered public ac- counting firm, or require the registered public accounting firm to end such asso- ciation; (ii) suspend or revoke the registration of the public accounting firm; and (iii) invoke such other lesser sanctions as the Board considers appropriate, and as specified by rule of the Board. (B) Procedure Any action taken by the Board under this paragraph shall be subject to the terms of section 7217(c) of this title. (4) Coordination and referral of investigations (A) Coordination The Board shall notify the Commission of any pending Board investigation involving a potential violation of the securities laws, and thereafter coordinate its work with the work of the Commission’s Division of En- forcement, as necessary to protect an ongo- ing Commission investigation.