作者：罗华 Laura Luo, 帝马修 Matthew Dickerson, New York Office, King & Wood Mallesons

2020年5月21日，美国参议会一致同意通过了《让外国公司负责法案》（“HFCAC法案”）。该法案如果变成法律，将会适用于在美国证券交易所上市的中概股，要求该类公司遵守美国法规及审计标准和信息共享，否则将面临退市的可能，尽管这样做可能会导致中概股违反中国法律。

在通过该法案后，美国众议院立即引入该法案的众议院版本，考虑到对该法案的广泛支持，预计可以在众议院迅速获得通过（甚至在本月底前）。如果在众议院获得通过，该法案将会被提交给特朗普总统进行签署和批准，之后正式成为法律。

法案的内容

法案主要修改了《2002年萨班斯-奥克斯利法案》（“SOX法案”），要求上市公司向美国证券交易委员会（“SEC”）披露关于外国司法管辖区禁止美国上市公司会计监督委员会（“PCAOB”）履行SOX法案规定的审查职责的信息。

具体而言，HFCAC法案要求SEC确定所有其审计师在外国设有办公室，但由于外国的法律法规的禁止而导致PCAOB无法对其进行检查或调查的上市公司（每一位该类公司称为“未受检查上市公司”）。HFCAC法案规定SEC需要求该类负有披露义务的上市公司向SEC提供文件，以证明和确认其不被外国政府拥有，也不受外国政府控制。

HFCAC法案进一步要求，如果审计委员会连续3年无法对上市公司的审计师进行检查，则SEC应禁止该上市公司的股票在美国任何全国性证券交易所（例如纳斯达克或纽约证券交易所）或任何场外交易市场进行交易。如上市公司能够向SEC证明，其已经聘用了PCAOB可以检查的审计师，则可以恢复其股票交易；但在之后再次出现无法检查的情形时，该恢复被立即撤销，且将导致一个新的5年禁止交易期。

此外，HFCAC法案要求上市公司必须在无法检查的每一年，披露其在其所在国政府持有的股份比例，不论该国政府是否对该上市公司拥有控制性的财务利益，该上市公司董事会（或上市公司运营实体）成员中属于中国共产党官员的名单，以及该上市公司章程性文件中是否包含任何中国共产党党章。

虽然HFCAC法案适用于所有外国公司，但HFCAC法案的发起人明确表述其提议该法案旨在针对中国。HFCAC法案基于由来已久的，美国监管机构对其眼中中国公司缺乏透明度的长期的、强烈的批评态度。

HFCAC法案的某些模糊之处？

HFCAC法案第2节修改了SOX法案第104节，增加了SEC应要求未受检查上市公司需向SEC提交证明该上市公司没有被外国政府拥有或控制的文件的要求（“新SOX法案 第 104(i)(2)(B)节”）。但此要求似乎存在一些问题。

  • 新SOX法案 第 104(i)(2)(B)节究竟要达到什么目的并不明确。具体而言，就是不明确其目的是否是为了禁止未受检查上市公司被外国政府“拥有或控制”。目前的实际情况是，在美国有报备义务且中国经营业务的公司要么是美国注册的公司，要么是“外国私有发行人”（每一个此类公司被称为“中概股”）。美国证券法对于 “外国私人发行人”的定义不包含外国政府；但是，“外国私人发行人”一词并不排除一家公司被外国“政府拥有或控制”的情形。因此，不清楚新SOX法案 第 104(i)(2)(B)节是否起到禁止任何被外国政府“拥有或控制”的外国私人发行人在美国上市的作用（注意SOX法案和HFCAC法案均未对“被拥有或控制”进行定义），也不清楚在未受检查上市公司无法证明其不被外国政府“拥有或控制”时的后果。在实际意义上，就意味着现有上市公司如果被视为被中国政府“拥有或控制”，且其如果无法满足新SOX法案 第 104(i)(2)(B)节的要求，则其是否可以继续维持其在美国的上市身份也就不清楚。需要注意的是，HFCAC法案要求SEC在法案正式成为法律后的90天内制定和颁布实施规则，具体规定上市公司按照新SOX法案第 104(i)(2)(B)节规定进行申报的方式及形式。有可能SEC的实施规则可能会对此进行澄清，并提供指引。
  • 此外，HFCAC法案第3(b)(2) 和(3)节要求，在未检查的年度，由外国的审计师进行审计的不受检查上市公司必须披露其在所在国被政府实体拥有的股权比例，以及外国政府实体是否对该等外国上市公司拥有控制性的财务利益。因此，新SOX法案第 104(i)(2)(B)节与HFCAC法案第3(b)节似乎存在矛盾，原因是上市公司被外国政府所有及控制在HFCAC法案第3(b)节属于披露事项，而在新SOX法案第 104(i)(2)(B)节下则似乎是禁止事项。
一些背景信息

HFCAC法案是中美政府就中概股在美国上市，且聘用外国审计师的公开披露义务的长期角力的最新动向。2012年12月, SEC对“四大”审计事务所的中国分支机构采取行政程序，因为其拒绝在SEC就某些中国公司被指控违反美国证券法的会计造假的调查中提供其审计底稿。作为回应，中国证券监督管理委员会（“CSRC”）与ACPOB签署了备忘录（“2013年备忘录”），试图为两国各自监管机构间有效交换审计文件建立合作框架，并协助各自的调查职能。但是，2013年备忘录包括的多项例外限制ACPOB在未经中国监管机构批准的情况下获取特定文件。自此，ACPOB多次抱怨中方合作不足，使其无法及时获得其执法所需的相关文件和证词。

2018年12月7日，SEC主席及ACPOB主席向美国资本市场投资人发布了一项联合声明，强调财务报表的披露透明作为美国及全球资本市场体系的基石的重要性，并强调对美国上市公司进行合规监管的必要信息“并不总是从外国司法区流向美国资本市场监管机构”。该声明提及ACPOB在检查224家美国上市公司的审计师工作时面临障碍，其中207家在2017年中期至2018年中期是由中国（包括香港）及比利时的审计师进行的审计。该联合声明详细讨论了SEC及ACPOB面临的在监管中概股的财务报告方面的重大挑战，以及中国法要求有关在中国发生的交易及事件的业务账簿及记录必须保存在中国。同时中国还限制审计师在中国开展的工作的底稿被转移至中国境外。联合声明威胁，将在重大信息障碍持续存在时采取“补救行动”，并敦促对此僵局采取政治解决措施。

这些情况导致美国弗罗里达州的共和党参议员Marco Rubio于2019年6月向美国参议院提起“确保基于外国并在我国证券交易所上市公司的质量信息及透明度法案”，不过此法案并没有通过委员会审查阶段。

2020年4月21日，SEC主席、ACPOB主席以及其他SEC官员发布了另一项联合声明，强调高质量、可信赖的财务报表的重要性，并再次强调ACPOB无法检查在中国的审计工作底稿。

在中国方面，除了中国国家安全法律法规禁止与外方分享特定敏感信息（即国家秘密）外，2020年3月1日，CSRC修订了中国证券法，并增加了新的第177条。第177条规定，未经国务院证券监督管理机构和国务院有关主管部门同意，任何单位和个人不得擅自向境外提供与证券业务活动有关的文件和资料。第177条对在美国上市的、被美国证券监管机构或证券交易所调查或询问的中概股（及其专业顾问）产生了明显的深远影响。这些公司在遵守中国禁止其转移及披露特定信息的法律和遵守美国要求其进行披露的法律中陷入了两难。

结论

对中概股而言，其合规困境源自中美两国之间的法律的冲突，因此，除非两国在监管机构层面进行协调和协作回应，对中概股而言，除非其从美国报备监管系统中退出，否则缺乏清晰的合规路径以维持其美国上市公司身份。因此，我们预计，如果HFCAC法案颁布为正式法律，可能促进和加速新一轮在美上市的中概股的“私有化”交易浪潮，以避免在各个管辖区无法合规的处境。

如有任何问题，请联系罗华律师

 

 

 

 

The Holding Foreign Companies Accountable Act and Delisting of US Listed Chinese Companies

On May 21, 2020, the United States Senate passed the Holding Foreign Companies Accountable Act (the “Bill”) with unanimous consent. The Bill would, if it becomes law, apply to Chinese companies listed on U.S. securities exchanges and require them to comply with U.S. regulatory and audit standards and information sharing or face the likelihood of delisting, notwithstanding that to do so may result in a breach of Chinese law.

Shortly after the passage of the Bill, the US House of Representatives introduced its version of the Bill, which is expected to swiftly pass in the House (even before the end of this month) because of perceived broad support for the Bill.  If approved there, it would be passed to President Trump for his approval and signature, following which it would become law.

The content of the Bill

The Bill primarily amends the Sarbanes-Oxley Act of 2002 (“SOX”) to require certain issuers to disclose to the Securities and Exchange Commission (the “SEC”) information regarding foreign jurisdictions that prevent the Public Company Accounting Oversight Board (the “PCAOB”) from performing inspections under SOX.

Specifically, the Bill requires the SEC to identify all reporting issuers whose auditor has an office in a foreign jurisdiction (the “Foreign Jurisdiction”); and whom the PCAOB is unable to inspect or investigate because the laws or rules of that Foreign Jurisdiction prohibit such inspection (each a “Non-Inspected Issuer”). The Bill also requires the SEC to require such reporting issuers to provide documents to the SEC to establish and confirm that it is not owned or controlled by a foreign government in the Foreign Jurisdiction.

The Bill further requires that, to the extent that the PCAOB has been unable to inspect a reporting issuers’ auditor for three (3) consecutive years, the SEC shall prohibit its stock from being traded on any national securities exchange (such as Nasdaq or the NYSE) or any over-the-counter markets in the United States. Reporting issuers can regain their ability to trade if they certify to the SEC that they have retained an auditor which the PCAOB has been able to inspect; but this is immediately revoked in the event of a subsequent recurrence of non-inspection, which would result in a new five (5) year period of trading prohibition.

In addition, the Bill requires that reporting issuers must disclose, for every year of non-inspection, the percentage of shares of the issuer owned by any foreign government in its home jurisdiction, whether such foreign government has any controlling financial interests in the issuer, the names of any member of the board of the issuer (or any operating entity of the issuer) who is an official of the Chinese Communist Party, and whether the constitutional documents of the issuer contain any charter of the Chinese Communist Party.

Although the Bill is written to apply to all foreign countries, the sponsors of the Bill explicitly targeted China in proposing the Bill.  The Bill comes in the wake of long-running and intense criticism of a perceived lack of transparency by Chinese firms by U.S. regulators.

Some Ambiguity in the Bill?

Section 2 of the Bill amends Section 104 of SOX to add the requirement for the SEC to require each reporting issuer identified by the SEC as a Non-Inspected Issuer to submit to the SEC documentation that establishes that such issuer is not owned or controlled by a government entity in the Foreign Jurisdiction (the “New SOX Section 104(i)(2)(B)”).  This section seems to raise a few questions:

  • It is unclear what purpose the New SOX Section 104(i)(2)(B) serves, specifically, whether it effectively prohibits a Non-Inspected Issuer from being “owned or controlled” by a government entity in the Foreign Jurisdiction. As it stands, a company listed or reporting in the U.S. with Chinese operations (each, a “S. Reporting Chinese Company”) is generally either a U.S. company or a “foreign private issuer,” which is defined under the U.S. securities rules, among other things, to exclude any issuer that is a foreign government. Nevertheless, the term “foreign private issuer” does not exclude a company that is “owned or controlled” by a foreign government. Therefore, it is unclear whether New SOX Section 104(i)(2)(B) would function as a prohibition of any foreign private issuer that is “owned or controlled,” which is undefined in the Bill, by a foreign government from being listed in the U.S.  It is also unclear what the consequences would be if a Non-Inspected Issuer fails to establish that it is not “owned or controlled” by a foreign government. In the practical sense, it is unclear whether existing listed companies that are deemed to be “owned or controlled” by the PRC government would be permitted to continue being listed in the U.S. if they are unable to conform to the requirements of New SOX Section 104(i)(2)(B). We note that the SEC is required to issue, within 90 days of enactment of the Bill into law, a rule establishing the manner and form in which an issuer makes the submission under New SOX Section 104(i)(2)(B). It may be that such SEC rules provide guidance and clarity on this uncertainty.
  • Additionally, Section 3(b)(2) and (3) of the Bill requires that, during a non-inspection year, the Non-Inspected Issuer that is audited by an auditor in the Foreign Jurisdiction must disclose, among other things, the percentage of its shares owned by government entities in its home jurisdiction and whether government entities in the Foreign Jurisdiction have a controlling financial interest in such foreign reporting issuer. As such, there appears to be a tension between the New SOX Section 104(i)(2)(B) and Section 3(b) in the sense that foreign government ownership and control is a matter of disclosure under Section 3(b) as opposed to a prohibition under New SOX Section 104(i)(2)(B).
Some Background

The Bill is the latest move in a longstanding tug of war between US and Chinese authorities regarding public disclosure obligations of Chinese firms listed on U.S. stock exchanges, with foreign auditors caught in the middle. In December 2012, SEC initiated administrative proceedings against the Chinese branches of the “big four” accounting firms for refusing to produce audit work papers and other documents related to China-based companies under investigation by the SEC for alleged accounting fraud against U.S. investors. In response, the PCAOB and the China Securities Regulatory Commission (the “CSRC”) signed a memorandum of understanding in 2013 (the “2013 MOU”) which attempted to establish a cooperative framework for the effective exchange of audit documents between each countries’ respective regulators in furtherance of their investigative duties. However, the 2013 MOU contained a number of exceptions which limited the PCAOB’s ability to obtain certain documents without Chinese regulatory approval. Since then, the PCAOB has been vocal in its complaint that Chinese cooperation has not been sufficient for it to obtain timely access to relevant documents and testimony necessary for the PCAOB to carry out its enforcement function.

On December 7, 2018, the Chairmen of each of the SEC and the PCAOB issued a joint statement addressed to investors in US capital markets, emphasising the importance of transparent disclosure of financial statements as the bedrock of the U.S. and global capital markets system, and highlighting that information necessary for proper regulatory oversight for U.S. listed companies “does not always flow to U.S. capital markets regulators from foreign jurisdictions to the extent it should”. The statement noted that the PCAOB faced obstacles in inspecting the auditors’ work with respect to 224 U.S. listed companies, out of which 207 were audited by auditors in China (including Hong Kong) and Belgium for the period between mid-2017 and mid-2018. The joint statement specifically discussed that SEC and PCAOB faced “significant challenges in overseeing financial reporting for U.S.-listed companies whose operations are based in China”,  that Chinese law required the business books and records related to transactions and events occurring within China to be kept and maintained in China, and that “China also restricts the auditor’s documentation of work performed in China from being transferred out of China”. The joint letter threatened “remedial action” in the event that significant information barriers persist, and urged a political solution to the deadlock.

This led to the bill, titled Ensuring Quality Information and Transparency for Abroad-Based Listings on our Exchanges (EQUITABLE) Act, sponsored by U.S. Senator Marco Rubio (R-FL), being introduced to the US Senate in June 2019, although it did not pass its Committee stage.

On April 21, 2020, the Chairmen of the SEC and the PCAOB and other SEC officials issued another joint statement highlighting the importance of high-quality, reliable audited financial statements and re-emphasising PCAOB’s inability to inspect audit work papers in China.

On the China side, in addition to China’s state secrecy laws and regulations that prohibit the sharing of certain sensitive information (i.e. state secrets) with foreign parties, on March 1, 2020, the CSRC amended the Securities Law of the PRC with new provisions at Article 177. Article 177 provides that, without the approval of the securities regulatory authority under the State Council and various components of the State Council, no entity or individual in China may provide documents and/or materials relating to securities business activities overseas. Article 177 has obviously far-reaching consequences for Chinese issuers listed on U.S. securities exchanges (and their professional advisors) that are under investigation or inquiry by a US regulatory authority or even a securities exchange. These companies are caught between compliance with PRC law which prohibits them from certain information transfer and disclosure, and compliance with US law which requires them to disclose.

Conclusion

For a U.S. Reporting Chinese Company, its compliance dilemma is fundamentally rooted in the tension between the laws of China and the United States. Therefore, unless there is a reconciling and collaborative response at the regulatory level between the two countries, there does not seem to be an apparent path to compliance for a U.S. Reporting Chinese Company who wishes to maintain its U.S. listing status, except to remove itself from U.S. reporting requirements.  As such, we anticipate that the Bill, if passed into law, may prompt and accelerate a new wave of “going private” transactions by Chinese issuers listed in the US, keen to avoid the consequences of a lack of compliance in their respective jurisdictions.

Please contact Laura Luo,