[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 945 Introduced in Senate (IS)]
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116th CONGRESS
1st Session
S. 945
To amend the Sarbanes-Oxley Act of 2002 to require certain issuers to
disclose to the Securities and Exchange Commission information
regarding foreign jurisdictions that prevent the Public Company
Accounting Oversight Board from performing inspections under that Act,
and for other purposes.
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IN THE SENATE OF THE UNITED STATES
March 28, 2019
Mr. Kennedy (for himself and Mr. Van Hollen) introduced the following
bill; which was read twice and referred to the Committee on Banking,
Housing, and Urban Affairs
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A BILL
To amend the Sarbanes-Oxley Act of 2002 to require certain issuers to
disclose to the Securities and Exchange Commission information
regarding foreign jurisdictions that prevent the Public Company
Accounting Oversight Board from performing inspections under that Act,
and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Holding Foreign Companies
Accountable Act''.
SEC. 2. DISCLOSURE REQUIREMENT.
Section 104 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7214) is
amended by adding at the end the following:
``(i) Disclosure Regarding Foreign Jurisdictions That Prevent
Inspections.--
``(1) Definitions.--In this subsection--
``(A) the term `covered issuer' means an issuer
that is required to file reports under section 13 or
15(d) of the Securities Exchange Act of 1934 (15 U.S.C.
78m; 78o(d)); and
``(B) the term `non-inspection year' means, with
respect to a covered issuer, a year--
``(i) during which the Commission
identifies the covered issuer under paragraph
(2)(A) with respect to every report described
in subparagraph (A) filed by the covered issuer
during that year; and
``(ii) that begins after the date of the
enactment of this subsection.
``(2) Disclosure to commission.--The Commission shall--
``(A) identify each covered issuer that, with
respect to the preparation of the audit report on the
financial statement of the covered issuer that is
included in a report described in paragraph (1)(A)
filed by the covered issuer, retains a registered
public accounting firm that has a branch or office
that--
``(i) is located in a foreign jurisdiction;
and
``(ii) the Board is unable to inspect under
this section; and
``(B) require each covered issuer identified under
subparagraph (A) to, in accordance with the rules
issued by the Commission under paragraph (4), submit to
the Commission documentation that establishes that the
covered issuer is not owned or controlled by a
governmental entity in the foreign jurisdiction
described in subparagraph (A)(i).
``(3) Trading prohibition after 3 years of non-
inspections.--
``(A) In general.--If the Commission determines
that a covered issuer has 3 consecutive non-inspection
years, the Commission shall prohibit the securities of
the covered issuer from being traded on a national
securities exchange.
``(B) Removal of initial prohibition.--If, after
the Commission imposes a prohibition on a covered
issuer under subparagraph (A), the covered issuer
certifies to the Commission that the covered issuer has
retained a registered public accounting firm that the
Board has inspected under this section to the
satisfaction of the Commission, the Commission shall
end that prohibition.
``(C) Recurrence of non-inspection years.--If,
after the Commission ends a prohibition under
subparagraph (B) or (D) with respect to a covered
issuer, the Commission determines that the covered
issuer has a non-inspection year, the Commission shall
prohibit the securities of the covered issuer from
being traded on a national securities exchange.
``(D) Removal of subsequent prohibition.--If, after
the end of the 5-year period beginning on the date on
which the Commission imposes a prohibition on a covered
issuer under subparagraph (C), the covered issuer
certifies to the Commission that the covered issuer
will retain a registered public accounting firm that
the Board is able to inspect under this section, the
Commission shall end that prohibition.
``(4) Rules.--Not later than 90 days after the date of
enactment of this subsection, the Commission shall issue rules
that establish the manner and form in which a covered issuer
shall make a disclosure and a submission required under clauses
(i) and (ii) of paragraph (2)(B), respectively.''.
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