Statement on PCAOB Rule 6100 to Fulfill Obligations under the HFCAA

On Thursday, the Securities and Exchange Commission unanimously approved a rule adopted by the Public Company Accounting Oversight Board (PCAOB) to fulfill its obligations under the Holding Foreign Companies Accountable Act of 2020 (HFCAA).

The HFCAA prohibits trading in an issuer’s stock if the company uses an audit firm for three consecutive years that a foreign jurisdiction prevents the PCAOB from inspecting completely, as determined by the PCAOB. Rule 6100 establishes the framework for the PCAOB to make these required determinations and is consistent with the requirements of the Sarbanes-Oxley Act.

This is an important step to protect U.S. investors. I believe it is critical that the Commission and the PCAOB work together to ensure that the auditors of foreign companies accessing U.S. capital markets play by the same rules.

The Commission adopted interim final rules to implement its required rulemaking under the HFCAA earlier this year. We remain on track to finalize those rules before the end of the year.

I’d like to thank the PCAOB and its staff for their work and collaboration on Proposed Rule 6100. I’d also like to thank the following SEC staff: Paul Munter, Natasha Guinan, Diana Stoltzfus, Omid Harraf, Anita Doutt, Mark Jacoby and Erin Nelson in the Office of the Chief Accountant; Bryant Morris and Ken Alcé in the Office of the General Counsel; Luna Bloom in the Division of Corporation Finance; Ted Venuti in the Division of Trading Markets; and Corey Klemmer in the Office of the Chair.