U.S. SEC mandates foreign companies spell out ownership structure, disclose auditing certifications
- United States
U.S.-listed foreign companies must now disclose whether they are owned or controlled by a governmental entity, and must provide clarifying evidence of their auditing inspections certifications, the Securities and Exchange Commission (SEC) said on Thursday in a new rule.
The measure adopted by a majority of the agency's five-member panel is aimed at capturing foreign companies listed on Wall Street that are audited by firms in jurisdictions where the U.S. public company accounting watchdog has been restricted from inspecting audit reports.
The agency also said its requirements clarify new rules by Congress meant to target how the law applies to variable interest entities (VIEs). The measure will "provisionally identify" such companies that require added disclosures for 15 business days, then will allow the companies to provide contradictory evidence.
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