15 U.S.C. § 7216 — Foreign public accounting firms

Page 2331 TITLE 15—COMMERCE AND TRADE § 7216 (d) Reporting of sanctions (1) Recipients If the Board imposes a disciplinary sanction, in accordance with this section, the Board shall report the sanction to— (A) the Commission; (B) any appropriate State regulatory au- thority or any foreign accountancy licensing board with which such firm or person is li- censed or certified; and (C) the public (once any stay on the impo- sition of such sanction has been lifted). (2) Contents The information reported under paragraph (1) shall include— (A) the name of the sanctioned person; (B) a description of the sanction and the basis for its imposition; and (C) such other information as the Board deems appropriate. (e) Stay of sanctions (1) In general Application to the Commission for review, or the institution by the Commission of re- view, of any disciplinary action of the Board shall operate as a stay of any such disciplinary action, unless and until the Commission or- ders (summarily or after notice and oppor- tunity for hearing on the question of a stay, which hearing may consist solely of the sub- mission of affidavits or presentation of oral arguments) that no such stay shall continue to operate. (2) Expedited procedures The Commission shall establish for appro- priate cases an expedited procedure for consid- eration and determination of the question of the duration of a stay pending review of any disciplinary action of the Board under this subsection. (Pub. L. 107–204, title I, § 105, July 30, 2002, 116 Stat. 759; Pub. L. 110–289, div. A, title I, § 1161(h), July 30, 2008, 122 Stat. 2781; Pub. L. 111–203, title IX, §§ 929F(h), 981(b), (c), 982(f), (i), (j), July 21, 2010, 124 Stat. 1855, 1926, 1927, 1929–1931.) Editorial Notes REFERENCES IN TEXT This Act, referred to in subsecs. (b)(1), (5)(B)(ii), (C)(i), (6) and (c)(3)(B), (4), (6)(A), 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. The Freedom of Information Act, referred to in sub- sec. (b)(5)(A), is section 552 of Title 5, Government Or- ganization and Employees. Section 552a of Title 5 is commonly known as the ‘‘Privacy Act’’. AMENDMENTS 2010—Subsec. (b)(4)(B)(ii) to (iv). Pub. L. 111–203, § 982(i), added cl. (ii) and redesignated former cls. (ii) and (iii) as (iii) and (iv), respectively. Subsec. (b)(5)(A). Pub. L. 111–203, § 981(c), substituted ‘‘subparagraphs (B) and (C)’’ for ‘‘subparagraph (B)’’. Subsec. (b)(5)(B)(ii)(V). Pub. L. 111–203, § 982(j), added subcl. (V). Subsec. (b)(5)(C). Pub. L. 111–203, § 981(b), added sub- par. (C). Subsec. (c)(6)(A). Pub. L. 111–203, § 929F(h)(1), sub- stituted ‘‘any person who is, or at the time of the al- leged failure reasonably to supervise was, a supervisory person’’ for ‘‘the supervisory personnel’’ in introduc- tory provisions. Subsec. (c)(6)(B). Pub. L. 111–203, § 929F(h)(2), in intro- ductory provisions, substituted ‘‘No current or former supervisory person’’ for ‘‘No associated person’’ and ‘‘any associated person’’ for ‘‘any other person’’. Subsec. (c)(7)(B). Pub. L. 111–203, § 982(f), in heading, inserted ‘‘, broker, or dealer’’ after ‘‘issuer’’ and, in text, substituted ‘‘a registered public accounting firm under this subsection’’ for ‘‘an issuer under this sub- section’’ and ‘‘any issuer, broker, or dealer’’ for ‘‘any issuer’’ in two places. 2008—Subsec. (b)(5)(B)(ii)(II). Pub. L. 110–289 inserted ‘‘and the Director of the Federal Housing Finance Agency,’’ after ‘‘Commission,’’. 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. § 7216. Foreign public accounting firms (a) Applicability to certain foreign firms (1) In general Any foreign public accounting firm that pre- pares or furnishes an audit report with respect to any issuer, broker, or dealer, shall be sub- ject to this Act and the rules of the Board and the Commission issued under this Act, in the same manner and to the same extent as a pub- lic accounting firm that is organized and oper- ates under the laws of the United States or any State, except that registration pursuant to section 7212 of this title shall not by itself provide a basis for subjecting such a foreign public accounting firm to the jurisdiction of the Federal or State courts, other than with respect to controversies between such firms and the Board. (2) Board authority The Board may, by rule, determine that a foreign public accounting firm (or a class of such firms) that does not issue audit reports nonetheless plays such a substantial role in the preparation and furnishing of such reports for particular issuers, brokers, or dealers, that it is necessary or appropriate, in light of the purposes of this Act and in the public interest or for the protection of investors, that such firm (or class of firms) should be treated as a public accounting firm (or firms) for purposes of registration under, and oversight by the Board in accordance with, this subchapter. (b) Production of documents (1) Production by foreign firms If a foreign public accounting firm performs material services upon which a registered pub- lic accounting firm relies in the conduct of an audit or interim review, issues an audit report, performs audit work, or conducts interim re- views, the foreign public accounting firm shall— (A) produce the audit work papers of the foreign public accounting firm and all other documents of the firm related to any such audit work or interim review to the Com- mission or the Board, upon request of the Commission or the Board; and Page 2332 TITLE 15—COMMERCE AND TRADE § 7217 (B) be subject to the jurisdiction of the courts of the United States for purposes of enforcement of any request for such docu- ments. (2) Other production Any registered public accounting firm that relies, in whole or in part, on the work of a foreign public accounting firm in issuing an audit report, performing audit work, or con- ducting an interim review, shall— (A) produce the audit work papers of the foreign public accounting firm and all other documents related to any such work in re- sponse to a request for production by the Commission or the Board; and (B) secure the agreement of any foreign public accounting firm to such production, as a condition of the reliance by the reg- istered public accounting firm on the work of that foreign public accounting firm. (c) Exemption authority The Commission, and the Board, subject to the approval of the Commission, may, by rule, regu- lation, or order, and as the Commission (or Board) determines necessary or appropriate in the public interest or for the protection of inves- tors, either unconditionally or upon specified terms and conditions exempt any foreign public accounting firm, or any class of such firms, from any provision of this Act or the rules of the Board or the Commission issued under this Act. (d) Service of requests or process (1) In general Any foreign public accounting firm that per- forms work for a domestic registered public accounting firm shall furnish to the domestic registered public accounting firm a written ir- revocable consent and power of attorney that designates the domestic registered public ac- counting firm as an agent upon whom may be served any request by the Commission or the Board under this section or upon whom may be served any process, pleadings, or other pa- pers in any action brought to enforce this sec- tion. (2) Specific audit work Any foreign public accounting firm that per- forms material services upon which a reg- istered public accounting firm relies in the conduct of an audit or interim review, issues an audit report, performs audit work, or, per- forms interim reviews, shall designate to the Commission or the Board an agent in the United States upon whom may be served any request by the Commission or the Board under this section or upon whom may be served any process, pleading, or other papers in any ac- tion brought to enforce this section. (e) Sanctions A willful refusal to comply, in whole in or in part, with any request by the Commission or the Board under this section, shall be deemed a vio- lation of this Act. (f) Other means of satisfying production obliga- tions Notwithstanding any other provisions of this section, the staff of the Commission or the Board may allow a foreign public accounting firm that is subject to this section to meet pro- duction obligations under this section through alternate means, such as through foreign coun- terparts of the Commission or the Board. (g) Definition In this section, the term ‘‘foreign public ac- counting firm’’ means a public accounting firm that is organized and operates under the laws of a foreign government or political subdivision thereof. (Pub. L. 107–204, title I, § 106, July 30, 2002, 116 Stat. 764; Pub. L. 111–203, title IX, §§ 929J, 982(g), July 21, 2010, 124 Stat. 1859, 1930.) Editorial Notes REFERENCES IN TEXT This Act, referred to in subsecs. (a), (c), and (e), 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 2010—Subsec. (a)(1). Pub. L. 111–203, § 982(g)(1), sub- stituted ‘‘issuer, broker, or dealer’’ for ‘‘issuer’’. Subsec. (a)(2). Pub. L. 111–203, § 982(g)(2), substituted ‘‘issuers, brokers, or dealers’’ for ‘‘issuers’’. Subsec. (b). Pub. L. 111–203, § 929J(1), added subsec. (b) and struck out former subsec. (b) which related to deemed consent to production of audit workpapers by foreign and domestic firms. Subsecs. (d) to (g). Pub. L. 111–203, § 929J(2), (3), added subsecs. (d) to (f) and redesignated former subsec. (d) as (g). 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. § 7217. Commission oversight of the Board (a) General oversight responsibility The Commission shall have oversight and en- forcement authority over the Board, as provided in this Act. The provisions of section 78q(a)(1) of this title, and of section 78q(b)(1) of this title shall apply to the Board as fully as if the Board were a ‘‘registered securities association’’ for purposes of those sections 78q(a)(1) and 78q(b)(1). (b) Rules of the Board (1) Definition In this section, the term ‘‘proposed rule’’ means any proposed rule of the Board, and any modification of any such rule. (2) Prior approval required No rule of the Board shall become effective without prior approval of the Commission in accordance with this section, other than as provided in section 7213(a)(3)(B) of this title with respect to initial or transitional stand- ards. (3) Approval criteria The Commission shall approve a proposed rule, if it finds that the rule is consistent with the requirements of this Act and the securities