SEC to Require Foreign Companies to Disclose Ownership
Foreign companies that list on U.S. stock exchanges must report to the Securities and Exchange Commission whether they are owned or controlled by a foreign government, the SEC announced Dec. 2. The change would “require Commission-Identified Issuers to submit documentation…
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to the SEC establishing that, if true, it is not owned or controlled by a governmental entity in the public accounting firm’s foreign jurisdiction,” the SEC said, adding that it will require evidence of the foreign company’s auditing inspections. The new requirement -- mandated by the Holding Foreign Companies Accountable Act, which was passed in 2020 -- could potentially subject more foreign companies to trade and investment restrictions if they are forced to disclose their ownership structures. President Joe Biden in June expanded a Trump-era policy that banned investments in Chinese companies with ties to the country’s military or that operate in the country’s surveillance technology sector (see 2106030067).