The U.S. Senate passes the Holding Foreign Companies Accountable Act

June 11, 2020

The United States Senate passed S. 945, the “Holding Foreign Companies Accountable Act” (the HFCAA), by unanimous consent on May 20, 2020.  The HFCAA was first introduced in the Senate on March 28, 2019 by Senator John Kennedy (R-LA) and co-sponsored by Senator Chris Van Hollen (D-MD).  On the same day of the HFCAA’s passage in the Senate, Representative Bradley Sherman (D-CA) introduced companion legislation in the United States House of Representatives that is identical to the HFCAA.  The HFCAA, which amends the Sarbanes-Oxley Act of 2002, (i) imposes potential trading prohibitions for non-compliance with certain audit-related requirements, and (ii) mandates additional reporting and disclosure requirements on reporting issuers whose securities are listed for trading on any U.S. securities exchange or are traded “over-the-counter” in the U.S., in each case effectively limiting access to U.S. capital markets for non-compliant reporting issuers.

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