March 25, 2021

China-Based Companies: SEC Adopts HFCA & Seeks Comments on Implementation

Last December, John blogged when “The Holding Foreign Companies Accountable Act” (HFCA) was signed into law. The law amends the Sarbanes-Oxley Act to prohibit listing on US exchanges of foreign companies for which the PCAOB has been unable to inspect audit work papers and is primarily aimed Chinese companies listed in the US. Yesterday, this SEC press release announced the adoption of interim final amendments relating to the HFCA’s submission and disclosure requirements.

Under the HFCA, “Commission-Identified Issuers” will need to submit certain disclosures to the Commission establishing that they’re not owned or controlled by a governmental entity in that foreign jurisdiction. These amendments implement a process for this disclosure requirement. Even with adoption of the amendments, there’s more work for the Commission before issuers are required to comply with them:

The Commission is requesting public comment regarding implementation of the HFCA submission and disclosure requirements, as well as the appropriate mechanics for determining Commission-Identified Issuers. A registrant will not be required to comply with the amendments until the Commission has identified it as having a non-inspection year under a process to be subsequently established by the Commission with appropriate notice. Once identified, a registrant will be required to comply with the amendments in its annual report for each fiscal year in which it is identified. The Commission plans to separately address implementation of the trading prohibitions in Section 2 of the HFCA Act in a future notice and comment process.

Ever Changing CCPA: Additional Changes Approved

Throughout the last year, we’ve blogged about changes to the California Consumer Privacy Act. Last week, California’s Office of Administrative Law approved a new set of changes to the CCPA. The changes are intended to provide clarity to consumers about how they can opt out of the sale of their personal information. Among other things, the modifications prohibit businesses from creating confusion for consumers to opt out of the sale of their personal information by clicking through multiple screens or using confusing language such as double negatives.

To help everyone stay on top of all of the various changes to the CCPA, check out our “Cybersecurity” Practices Area – this Gibson Dunn memo provides a quick summary of the most recent modifications.

March-April Issue: Deal Lawyers Newsletter

The March-April Issue of the Deal Lawyers  newsletter was just posted – & also mailed (try a no-risk trial). It includes articles on:

– Troubling Signs From Recent M&A Case Law: Forgetful Gatekeepers, Targeted Executives, and Poor Record Building

– COVID-19 Deal Terminations: Assessing Specific Performance Provisions

– A Canadian Perspective: The 2021 US and Canadian M&A Landscape

Remember that you can also subscribe to our newsletters electronically – an option that many people are taking advantage of in the “remote work” environment. Also – as a “thank you” to those that subscribe to both & our Deal Lawyers print newsletter – we make all issues of the Deal Lawyers print newsletter available online. There is a big blue tab called “Back Issues” near the top of – 4th from the end of the row of tabs. This tab leads to all of our issues, including the most recent one.

And a bonus is that even if only one person in your firm is a subscriber to the Deal Lawyers print newsletter, anyone who has access to will be able to gain access to the Deal Lawyers print newsletter. For example, if your firm has a firmwide license to – and only one person subscribes to the print newsletter – everybody in your firm will be able to access the online issues of the print newsletter. That is real value. Here are FAQs about the Deal Lawyers print newsletter including how to access the issues online.

– Lynn Jokela