北美时间4月22日， 美国证券交易委员会（SEC）主席克莱顿（Jay Clayton）在接受媒体采访时称，“现在是机构投资者审查、重新平衡和评估其投资组合的时候。我们要提醒大家，当你看到新兴市场发行者披露信息时，它虽然看起来就像是美国本土发行者的报告，但这不是同一类投资。”他直言风险是不同的，且难以察觉。
SEC主席亲自上电视“怼”中概股，美国汇盛金融首席经济学家陈凯丰称这是“有史以来第一次”，大家如果嗅觉灵敏，可以想象这个属于提前警告，下一步可能是很多公司股票会被调查，似乎暴风雨来临前的宁静。
据第一财经报道，就在同一周，克莱顿、美国上市公司会计监督委员会（PCAOB）主席 William Duhnke III（威廉·杜恩克三世）以及SEC 首席会计师 Sagar Teotia（萨加尔 西奥蒂亚）等多位官员联名发布警告投资者文件，指出投资者在市场动荡后进行投资组合再平衡时，由于新兴市场投资存在信息披露不完整或存在误导性的风险、在投资者利益受到损害的情况下获得追索权的机会甚微，新兴市场上市公司和美国公司在信息披露、证券报价和其他以投资者为导向的信息中仍然存在不对称性等风险。
实际上，PCAOB也并非第一次对中概股的审计提出加严要求，有观点认为，美国相关监管此举或许与近期集中爆发的中概股业绩被质疑，以及瑞幸自曝数据作假有直接关系。
“从4月份以来，中概股被做空、数据暴雷、集体诉讼都空前的集中。”北京郝俊波律师事务所主任律师郝俊波在接受第一财经记者采访时表示，中概股被诉讼并不是今年才发生，而是一个持续的情况，但数量并不算多。“瑞幸咖啡的事件空前的严重，激化了市场情绪，因为以前上市公司最多是被做空，还没有发生过公开确认高管直接参与作假的情形。”
SEC接连点名新兴市场
SEC本周二发布了一则声明，称PCAOB在中国无法检查审计工作文件的情况仍在继续。
声明直言在过去几十年中，美国投资者的投资组合越来越多地投资于总部设在新兴市场的公司，或在新兴市场有重要业务的公司。这一风险敞口包括对美国发行者和外国私人发行者(“FPIs”)的投资，这些发行者或位于新兴市场，或在新兴市场有重要业务。在此期间，中国已成长为最大的新兴市场经济体和世界第二大经济体。
声明指出，SEC的使命有三：保护投资者；维护市场完整性，促进资本形成；确保投资者和其他市场参与者能够获得高质量、可靠的信息披露，包括财务报告是促进上述各项目标努力的核心。
然而，SEC认为其在新兴市场推广和执行这些标准的能力有限，在很大程度上取决于地方监管当局的行动，而地方监管当局的行动又受到这些市场国家或地区政策考虑的制约。因此，与美国本土公司相比，在包括中国在内的许多新兴市场，披露不完整或误导的风险要大得多，而且在投资者受到损害的情况下，获得追索权的机会也要小得多。“这种显著的不对称性即使披露也成立，价格报价和其他面向投资者的信息通常以与美国本土公司基本相同的形式呈现。”
紧接着，SEC再次提出一个所谓的“遗留问题”——PCAOB在中国无法检查审计工作文件。SEC认为，投资者和金融专业人士应该考虑PCAOB无法在中国检查注册会计师事务所的潜在风险。发行人应明确披露由此产生的重大风险。审核员应在执行质量审核时实施适当的质量控制。
问责制是美国证券法的一个重要方面，对发行人和把关人来说也是如此，其中包括个人问责制。美国证券交易委员会、美国司法部(“DOJ”)和其他当局在对非美国公民提起和执行诉讼时经常遇到很大的困难。“某些新兴市场(包括中国)的人员，包括公司董事和管理人员。发行人应明确披露相关重大风险。”
SEC认为，PCAOB无法检查所认可的相关注册会计师事务所的审计工作和执行在中国的(包括香港,其审计客户在华业务)对美国报告公司的审计工作，投资者在投资审计机构位于中国的公司时，应了解PCAOB缺乏准入渠道的潜在影响。而在中国有业务的发行人应明确披露这些风险，包括将这些限制作为风险因素加以强调。
PCAOB和中概股的“旧账”
梳理公开信息可以发现，PCAOB对中概股发表“意见”不是第一次，SEC也多次发表声明严查赴美上市公司。
2018年11月，克莱顿、SEC总会计师Wes Bricker（韦斯·布里克）和PCAOB主席威廉·杜恩克三世就《关于审计质量和监管获取审计及其他国际信息的重要作用》发表联合声明，认为在对赴美上市公司信息获取方面的问题依旧存在，而中国公司被着重点名。
该《声明》称，当前最重要的问题之一，是PCAOB是否有能力检查那些在PCAOB注册过的中国会计师事务所做的审计工作和实际情况。这些会计师事务所主要包括审计在美上市中国企业的内地会计师事务所，和那些帮助审计中国内地业务的香港会计师事务所。
PCAOB是会计行业的自律性组织，也是一家私营的非营利性机构，因萨班斯法案而建立。PCAOB有权制定或采纳职业团体建议的审计与相关鉴证准则、质量控制准则以及职业道德准则等。
PCAOB由不同会员事务所的会计师组成，PCAOB如认为适当，将与指定的、由会计专家组成的、负责制定准则或提供咨询意见的专业团体保持密切合作，有权对这些团体建议的准则进行补充、修改、废除或否决。PCAOB须每年就准则制定情况向SEC提交年度报告。而SEC将对PCAOB进行监管，包括委员会所制定的规则的认定、标准和预算。
另一个被提及的重大挑战是关于PCAOB审计检查和信息的相关法律法规的使用。PCAOB一直在努力增加对中国审计工作文件的访问，但进展缓慢。如果PCAOB不能对在美国上市的外资公司进行审计检查，这些公司的投资者便不能从PCAOB检查中获得有形的、提高投资质量的信息。
实际上，已经发生多起因会计信息披露引发的诉讼，PCAOB也随后列出了了遭遇审计障碍公司的详细清单，共计224余家，其中213家为中国公司。
好企业不怕查
2010年以来，美国市场已从次贷危机阴影中走出。但是受到美国浑水公司做空、监管机构审查等因素的影响，在美上市的中概股公司集体遭遇信任危机，东方纸业、绿诺科技、多元环球水务和中国高速传媒这四家中概股企业在遭受做空后股价大跌，分别被交易所停牌或摘牌。
2020年1月31日，海外做空机构浑水研究发布了瑞幸咖啡的做空报告，之后4月2日瑞幸咖啡承认财务造假，引发市场广泛关注。此外，近期多家中概股被海外机构做空，但并非所有的做空都被认定为是“实锤”。
比如，瑞幸咖啡的做空机构动员了大量人力物力进行了实地调研，所获取数据具备较高的真实性，指出了公司的财务造假问题，并最终被公司承认；但类似爱奇艺、跟谁学的做空报告，部分数据来源于互联网等渠道，尚缺乏实地调研，且被公司坚决否认，真实性有待甄别。
“由于美股允许做空存在，做空机构有非常强大的利益动机去调查上市公司作假，这是市场规则之一，你如果真的作假，就可能是去给这些机构送钱。” 郝俊波表示，不论是在中国上市还是在美国上市的公司，既然上市，就难以有“秘密”。有效且真实的数据公开是对投资者负责，也是让投资者来了解公司最有效的途径。“好公司不怕查。”
从多家中概股被海外机构做空以及被曝财务造假的情况，总结规律与经验，这些公司往往存在高成长性、关键数据难以证实或证伪、显著高于同行的盈利水平、不同文件之间财务数据的差异性、管理层行为异动等共性，因而成为海外做空机构关注的焦点。
兴业研究表示，被做空或被曝财务造假的中概股企业，以互联网平台类、科技类、2C消费类公司较多，具备高成长性的特点，公司过往的历史数据可参考性低，难以用来与现有数据做纵向对比，导致财务数据具备较多难以解释的谜团。
此外，某些中概股提交给SEC的财报与其他文件中的财务数据有所差异，例如爱奇艺、跟谁学向SEC提交的财报，与其招股说明书或信用报告中的关键财务数据不同，被做空机构关注。某些中概股企业的毛利率、净利率等关键盈利数据显著高于同行，被海外做空机构重点关注，例如跟谁学的毛利率显著高于同行，与公司主业所体现的竞争力不符。
而某些中概股的产品或商业逻辑具备创新性和独特性，难以寻找类似的可比公司做横向对比，真实客户数量、产品销量、销售价格及利润等关键数据统计口径复杂且繁琐，难以被简单证实以及证伪，例如爱奇艺某些独家影视作品的版权交易费。
“瑞幸咖啡让全世界都发现作假严重的程度，之后又出现一系列公司的做空报告，SEC确实有点坐不住了。”郝俊波表示，在此情形下市场容易草木皆兵，中概股必须谨慎经营，避免出现财务作假或者任何形式的虚假陈述的情况。“做空机构出手可能会对股价产生影响，但是好的公司，不怕查。”
中概股为何屡遭调查？
据证券时报报道，华泰证券研究员张馨元等曾在一份研究报告中梳理2000年以来中概股及其外部审计师受美国监管机构会计合规审查的重点案例。该报告认为，中概股面临的监管形势从“查违规、抓欺诈”逐步向审核会计处理的公允性与信披的完备性演进，且面临更为渗透的审计跨境监督。
该报告认为，美国监管机构对中概股或其外部审计师进行调查或起诉通常有以下四类原因，包括公司内部会计处理明显违规，如2001年网易公司事件、2004年UT斯康达事件等；公司存在欺诈行为，如2011年东南融通事件、2011年中国高速频道事件等；公司内部会计政策存在争议，如2012年新东方事件、2015年优酷土豆事件等；以及争夺审计跨境监管权限，如2011年德勤中国事件、2016年针对阿里巴巴与百度的调查等。
此外，历史上中概股内部会计处理违规的高发领域在于收入确认，如错误地提前确认收入、销售人员签订“阴阳合同”等；欺诈行为的常见形式为虚报收入、净利润、现金余额，以及与不明实体的现金交易；会计政策争议事件多发生于长期股权投资的会计处理，如是否对子公司有 控制权？应当采取权益法还是并表处理？此外，风险披露的完备性、收入确认以及关联交易的会计处理亦在会计政策争议中较常出现。
而对于关于赴美上市中资企业的审计底稿问题，资深证券律师、安理律师事务所合伙人盛芝然接受记者采访时表示，中美两国对跨境审计监管的僵局，源于两国深层次的内在矛盾，有一定的必然性。这种内在矛盾主要体现在三个方面：一是中美两国法律对是否应该向美国监管部门提供审计底稿存在重大差异；二是中国政府“完全信任”原则与美国政府“长臂管辖”原则的冲突，实则是政府主权在监管合作方面的具体体现；三是中美两国资本市场的开放程度不同，以及在信息披露的内容及标准方面的差异。虽然中美两国就审计监管问题在2013年签署过合作备忘录，但该问题依然呈现出长期博弈的特点，短期内仍然无法有效解决。
不过，截至发稿，在美上市的主要中概股涨跌互现，未受明显影响。
事实上，尽管瑞幸咖啡财务造假事件使得中概股饱受质疑，但在美国主要股票指数3月份出现连续熔断和暴跌的背景下，中概股整体表现仍然优于美股市场。统计数据显示，阿里巴巴、京东、拼多多、哔哩哔哩等优质中概股过去一年的股价表现仍然跑赢大盘指数。
美国SEC发布针对中概股的声明（全文）
财联社4月23日讯，美国证券交易委员会（SEC）主席杰伊·克莱顿(Jay Clayton)北京时间4月23日发布言论称，因为信息披露的问题，他提醒投资者近期在调整仓位时，不要将资金投入在美国上市的中国公司股票。在克莱顿发表上述言论之际，美国鹰派议员和部分前官员正努力说服特朗普政府让联邦雇员退休金计划停止投资中国企业股票。
而美国SEC周二亦发布过一个提示性报告称，在美国上市的中国公司应该“用通俗易懂的语言突出地提出风险，并以具体的方式加以讨论”。
美国证监会（SEC）4月21日发表主席Jay Clayton及美国公众公司会计监督委员会（PCAOB）主席William Duhnke等五位官员的声明，提醒美国境内投资者在投资总部位于新兴市场或在新兴市场有重大业务的公司时，注意财务报告及信息披露质量的风险。
这篇题为《新兴市场投资涉及重大信息披露、财务报告和其他风险，补救措施有限》的文章称，SEC和PCAOB在美国境内对信息披露质量的执法标准，在对来自新兴市场在美上市公司的推广和执行中受到限制；
声明称，“与美国国内相比，包括中国在内的许多新兴市场，信息披露不完全或具有误导性的风险要大得多，并且在投资者受到损害时，获得追索的机会要小很多。”这些公司“应该以简明扼要的英文提出风险，并具体阐述” 。
SEC发布的声明还指出，PCAOB在获取对在美上市中国公司进行审计所需的基础工作文件方面能力有限。PCAOB是美国公众公司会计监督委员会，根据2002年的《萨班斯·奥克斯利法案》创立，其任务是监督公众公司的审计报告。
美最新声明：在美中概股将面临严拷（全文）
美国要检查阿里百度审计底稿 中美专业领域较量揭开序幕？
以下是声明全文
Emerging Market Investments Entail Significant Disclosure, Financial Reporting and Other Risks; Remedies are Limited
SEC Chairman Jay ClaytonPCAOB Chairman William D. Duhnke IIISEC Chief Accountant Sagar TeotiaSEC Division of Corporation Finance Director William HinmanSEC Division of Investment Management Director Dalia Blass
April 21, 2020
The PCAOB's Inability to Inspect Audit Work Papers in China ContinuesIntroduction[1]
Over the past several decades, the portfolios of U.S. investors have become increasingly exposed to companies that are based in emerging markets[2] or that otherwise have significant operations in emerging markets.[3] This exposure includes investments in both U.S. issuers and foreign private issuers (“FPIs”) that are based in emerging markets or have significant operations in emerging markets. During this time, China has grown to be the largest emerging market economy and the world’s second largest economy.[4]
The SEC’s mission is threefold: protect our investors, preserve market integrity and facilitate capital formation. Ensuring that investors and other market participants have access to high-quality, reliable disclosure, including financial reporting, is at the core of our efforts to promote each of those objectives. This commitment to high-quality disclosure standards—including meaningful, principled oversight and enforcement—has long been a focus of the SEC and, since its inception, the PCAOB.
Our ability to promote and enforce these standards in emerging markets is limited and is significantly dependent on the actions of local authorities—which, in turn, are constrained by national policy considerations in those countries. As a result, in many emerging markets, including China, there is substantially greater risk that disclosures will be incomplete or misleading and, in the event of investor harm, substantially less access to recourse, in comparison to U.S. domestic companies.[5]This significant asymmetry holds true even though disclosures, price quotes and other investor-oriented information often are presented in substantially the same form as for U.S. domestic companies. Immediately below, we summarize some of these risks and related considerations specific to issuers, auditors, index providers and financial professionals. In the body of this statement, these matters are discussed in more detail.
Emerging Market Risk Disclosures are Important. Companies that have operations in emerging markets, and investors in those companies, often face greater risks and uncertainties than in more established markets. Issuers reporting with the SEC should clearly disclose these matters to investors. Similarly, funds investing in emerging markets should ensure that their material risk disclosures are adequate and in compliance with federal securities laws. Many risks and uncertainties are industry- and jurisdiction-specific. Boilerplate disclosures generally are not useful or sufficient in these circumstances.
Quality of Financial Information, Requirements and Standards Vary Greatly. Investors and financial professionals should carefully consider the nature and quality of financial information, including financial reporting and audit requirements, when making or recommending investments. Issuers should ensure that relevant financial reporting matters are discussed with their independent auditors and, where applicable, audit committees.
The PCAOB’s Inability to Inspect Audit Work Papers in China Continues. Investors and financial professionals should consider the potential risks related to the PCAOB’s lack of access to inspect PCAOB-registered accounting firms in China. Issuers should clearly disclose the resulting material risks. Auditors should have appropriate quality controls in place related to executing quality audits.
The Ability of U.S. Authorities to Bring Actions in Emerging Markets May Be Limited. Accountability, for issuers and gatekeepers, including individual accountability, is a key aspect of U.S. securities law. The SEC, U.S. Department of Justice (“DOJ”) and other authorities often have substantial difficulties in bringing and enforcing actions against non-U.S. companies and non-U.S. persons, including company directors and officers, in certain emerging markets, including China. Issuers should clearly disclose the related material risks.
Shareholders Have Limited Rights and Few Practical Remedies in Emerging Markets. Shareholder claims that are common in the United States, including class action securities law and fraud claims, generally are difficult or impossible to pursue as a matter of law or practicality in many emerging markets. Issuers should clearly disclose any material limitations on shareholder rights.
Passive Investing Strategies Do Not Take Account of These Risks. Investors should understand that an index fund tracking a specific emerging market index generally does not directly weight securities on the basis of investor protection limitations or differences in the quality of financial reporting and available oversight mechanisms.
Investment Advisers, Broker-Dealers and Other Market Participants Should Consider Emerging Market Risks. Financial professionals generally should consider the limitations and other risks described above, when recommending investments in emerging markets.
Investors should recognize that these considerations (1) often are significant, (2) vary from jurisdiction to jurisdiction and company to company, and (3) are just some of the factors that may contribute to effective investment decision making, including portfolio and index construction.
This statement should not be viewed as an effort to restrict access to emerging market investments. Investor choice has long been a core component of our capital markets regulatory framework, and emerging market investments, including as a component of a diversified portfolio, have proven to be beneficial to many investors. The combination of (1) full and fair disclosure, (2) meaningful, principled oversight and enforcement and (3) broad investor choice, has made the U.S. capital markets the world’s deepest and most vibrant, benefiting investors, issuers and economic welfare domestically and globally. This statement reflects our commitment to preserving and promoting each component of that important and powerful combination.
Disclosure Requirements of Companies Reporting with the SEC—Importance of High-Quality, Reliable Audited Financial Statements—Emerging Market Disclosures Often are Different in Scope and Quality Despite Appearing Similar in Form
Companies that have significant operations in emerging markets often face greater risks and uncertainties, including idiosyncratic risks, than in more established markets. Issuers reporting with the SEC should clearly disclose these matters to investors. Boilerplate disclosures generally are not useful or sufficient in these circumstances. For example, issuers should carefully consider the environment in which the company operates in assessing whether the company has sufficient controls, processes and personnel to address its accounting or financial reporting issues. These potentially unique operating considerations also should be considered and reflected in financial and operational disclosures more generally, including disclosures of material risks, trends, uncertainties, accounting judgments and other items that are material to an investor.
The bedrock of our globally interconnected capital market system has long been high-quality, reliable audited financial statements. Without high-quality, reliable financial information, capital markets do not function well, increasing capital costs and risks of misconduct, including the potential for investors to be defrauded.
Companies that file annual reports with the SEC, including FPIs (non-U.S. issuers that qualify as foreign private issuers under our rules), must file financial statements that have been audited by an independent, PCAOB-registered accounting firm. Management is responsible for the preparation of the financial statements, including responsibility for establishing and maintaining disclosure controls and procedures (“DCP”) and internal control over financial reporting (“ICFR”), and for maintaining accountability for the company’s assets, among other things.[6] The auditor is responsible to plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether caused by error or fraud.[7] Management for companies that file annual reports with the SEC, including FPIs, must determine that the financial statements, and other financial information included in the report filed with the SEC, fairly present in all material respects the financial condition, results of operations and cash flows of the company.[8]
In addition to annual reports with audited financial statements, companies subject to the periodic reporting requirements under the Securities Exchange Act of 1934 (“Exchange Act”), other than FPIs, must file quarterly reports[9] that include interim financial statements reviewed by an auditor and other disclosure items, and certifications by the principal executive and financial officers of the reporting company.[10] By contrast, FPIs subject to the periodic reporting requirements of the Exchange Act are not required to file quarterly reports or quarterly certifications by the principal executive and financial officers of the FPI, but rather are only required to furnish certain interim information in specified circumstances.[11]
While the form of disclosure may appear substantially the same as that provided by U.S. issuers and FPIs in many jurisdictions, it can often be quite different in scope and quality. Furthermore, that scope and quality of disclosure can significantly vary from company to company, industry to industry, and jurisdiction to jurisdiction.
Financial Reporting and Other Disclosure Risk in Emerging Markets
Investors and financial professionals should carefully consider the nature and quality of financial information, including financial reporting and audit requirements, as well as other disclosure risk, when making investment decisions regarding companies that are based in, or have significant exposure to, emerging markets. These risks vary significantly depending on a variety of factors.
The frequency, availability and quality of financial information about potential investments in emerging markets may vary. For example, while a U.S. broker may be able to process an order for shares of a company that only trades on an emerging market securities exchange, these foreign-traded companies are not likely to file reports with the SEC. The information available about these companies, and its reliability, generally is significantly less than the information available about companies that file reports with the SEC, including because these companies generally are not subject to the same regulatory, accounting, auditing or auditor oversight requirements applicable to companies that file reports with the SEC.
In this regard, it is important to understand the critical role that issuers, audit committees, auditors and regulators each play in the U.S. financial reporting system. In other words, there are a series of checks and controls that work together to promote high-quality, reliable financial information. Similarly, investors and other stakeholders should clearly understand how any limitations on the scope of these roles have an impact on the information provided.
For example, audit committees of operating companies and funds reporting with the SEC play a vital role through their oversight of financial reporting, including ICFR and the external, independent audit process.[12] In 2002, the Sarbanes-Oxley Act[13] introduced a number of requirements to increase and strengthen the role of audit committees in financial reporting, including the independent audit committee requirement. We believe the measures related to audit committees have proven to be some of the most effective financial reporting enhancements included in the Sarbanes-Oxley Act.[14]However, not all jurisdictions mandate independent audit committees or have similar requirements. Investors should consider the impact of a company’s corporate governance structure, including the role of the audit committee or similar oversight, when making investment decisions in emerging markets.
In addition, while FPIs are generally subject to the SEC’s reporting and oversight regulations discussed above, not all those regulations apply. Further, as discussed in more detail below, the ability of U.S. authorities to bring actions for violations of those regulations may be limited in foreign jurisdictions and particularly limited in emerging markets, including in China, the world’s largest emerging market. Issuers should discuss these matters with their independent auditors (and where applicable, audit committees) and should disclose the related material risks.
To promote high-quality financial reporting and reliable audits for issuers reporting with the SEC, we continue to meet with those involved in the financial reporting system, including investors, preparers, audit committees and auditors to listen to stakeholder concerns, understand emerging issues and risks, answer questions and share views on current financial reporting matters. Investors, financial professionals and index providers should consider carefully that this type and level of engagement may not occur in emerging markets.
PCAOB’s Inability to Inspect Audit Work Papers in China Continues
Investors and financial professionals should consider the potential risks related to the PCAOB’s lack of access to the work of PCAOB-registered accounting firms in China. Issuers should clearly disclose the resulting risks to investors.
The Chairman of the SEC and the Chairman of the PCAOB, as well as staff from the SEC and the PCAOB, have on various occasions reminded investors of the significant risks related to investments in China due to the inability of the PCAOB to inspect[15] audit work and practices of PCAOB-registered accounting firms in China (including Hong Kong, to the extent their audit clients have operations in China) with respect to their audit work of U.S. reporting companies.[16]
Investors should understand the potential impacts of the PCAOB’s lack of access when investing in companies whose auditor is based in China. Even when the auditor signing the audit report is not based in China, if the company has operations in China, investors should consider whether significant portions of the audit may have been performed by firms in China, and the potential impact of the PCAOB’s inability to access such audit work papers. Investors can access information about the PCAOB’s lack of access on the PCAOB’s website.[17]
Given the importance to investors of understanding the potential material risks related to the PCAOB’s lack of access related to PCAOB-registered accounting firms in China, issuers with operations in China should make clear disclosures regarding these risks, including highlighting these limitations as a risk factor.[18]
In connection with our ongoing efforts to address a number of issues related to the quality of financial reporting and auditing in emerging markets, we have been meeting with senior representatives of the six largest U.S. audit firms and representatives of their global networks. To be clear, these discussions with the audit firms are not intended to be a substitute for the PCAOB inspecting audit work and practices of PCAOB-registered accounting firms in China with respect to their audit work of U.S.-listed companies. These meetings have included discussions regarding audit quality across their global networks and the importance of effective and consistent oversight of member firms globally, including those operating in China and other emerging markets.[19] In each of these meetings, the audit firms have recognized their responsibilities as auditors and acknowledged the importance of consistent audit methodologies across their global networks. We were clear in sharing our expectations that they fulfill these responsibilities.
Enforcement Actions by the SEC, DOJ and Other U.S. Authorities May Be Limited
Accountability for issuers and gatekeepers, including individual accountability, is a key aspect of U.S. securities law. The SEC, DOJ and other authorities often have substantial difficulties in bringing and enforcing actions against non-U.S. companies and non-U.S. persons, including company directors and officers, in certain emerging markets. Issuers should clearly disclose the related risks.
Investors, including individual investors, funds and companies, should understand potential limitations on enforcement actions when making investment decisions in emerging markets. Due to jurisdictional limitations, matters of comity and various other factors, the SEC, DOJ and other U.S. authorities may be limited in their ability to pursue bad actors, including in instances of fraud, in emerging markets. For example, in China, there are significant legal and other obstacles to obtaining information needed for investigations or litigation.[20]Similar limitations apply to the pursuit of actions against individuals, including officers, directors and individual gatekeepers, who may have engaged in fraud or other wrongdoing. In addition, local authorities often are constrained in their ability to assist U.S. authorities and overseas investors more generally. There are also legal or other obstacles to seeking access to funds in a foreign country. Issuers should clearly disclose the related material risks and financial professionals should consider these risks when making or recommending investment decisions.
Shareholder Rights; Shareholder Recourse
Shareholder claims that are common in the U.S., including class action securities law and fraud claims, generally are difficult or impossible to pursue as a matter of law or practicality in many emerging markets. Issuers should clearly disclose any material limitations on shareholder rights.
Investors should understand legal and practical differences affecting their ability to protect their interests when making investment decisions in emerging markets. Where investors purchase a security can affect whether they have, and where they can pursue, legal remedies against the foreign company or any other foreign-based entities involved in a transaction. Investors in emerging markets may not have the ability to seek certain legal remedies in U.S. courts as private plaintiffs. Moreover, even if investors sue successfully in a U.S. court, they may not be able to collect on a U.S. judgment against a company, entity or person, including company directors and officers, in an emerging market, particularly when the company’s assets and those of its directors and officers are located in an emerging market. As a practical matter, investors may have to rely on domestic legal remedies that are available in the emerging market. These remedies often are limited and difficult for international investors to pursue.
Given the importance of a clear understanding of these risks to investors, management of companies based in jurisdictions where there may be significant limitations on an investor’s ability to seek redress should make clear disclosures regarding these risks, including highlighting these limitations as a risk factor.
Drafting and Presenting Risk Disclosure: Disclosure Should be Prominent and Clear; Boilerplate Disclosure is Not Sufficient
In light of both the significance and company-specific nature of the risks discussed in this statement, we expect issuers to present these risks prominently, in plain English and discuss them with specificity.[21] Issuers based in emerging markets should consider providing a U.S. domestic investor-oriented comparative discussion of matters such as (1) how the company has met the applicable financial reporting and disclosure obligations, including those related to DCP and ICFR and (2) regulatory enforcement and investor-oriented remedies, including as a practical matter, in the event of a material disclosure violation or fraud or other financial misconduct more generally. Similarly, as discussed further below, registered funds, including those investing in emerging markets, must disclose the principal risks of investing in the securities they hold in their prospectuses and summary prospectuses; this should also be presented in plain English and with specificity as to the fund’s investments.[22]
Passive Investing; Index Construction
Investors should understand that an index fund tracking a specific emerging market index generally does not consider or weigh investor protection considerations when investing in a particular security.
In addition to a number of considerations when investing in any fund, investors in index funds and other passively-managed funds should understand the potential impact of the fund’s passive investing strategy on the investor’s exposure to risks in emerging markets. For example, an emerging market index fund may seek to track a specific emerging market index, and therefore may invest in all of the securities included in that index or only a sample of those securities. However, the composition of the emerging market index itself generally would not weigh individual securities by investor protection considerations. That is, in index construction, decisions are made on a jurisdiction-wide basis. For example, once a jurisdiction is included, individual securities from that jurisdiction are included in the index based on the index provider’s specific weighting methodology (e.g., based on market capitalization). The index may or may not weigh the jurisdiction as a whole on the basis of investor risk or other factors in addition to market capitalization.
Investors and financial professionals should consider these index construction decisions and the related risks when making or recommending investment decisions in such funds.
Considerations for Investment Advisers and Funds
Financial professionals generally should consider limitations on the quality or availability of information, as well as the other risks described above, when recommending investments in emerging markets. Funds investing in emerging markets should consider whether they have adequate risk disclosure about the unique risks and uncertainties that companies with significant operations in emerging markets often face. Boilerplate disclosures generally are not useful or sufficient in these circumstances.
In addition to the general considerations for investors above, investment advisers and funds should be mindful of their obligations under the Investment Advisers Act of 1940 (“Advisers Act”) and Investment Company Act of 1940 with respect to investments in emerging markets.
Investment advisers, including advisers to funds, have a fiduciary duty to their clients under the Advisers Act, including a duty of loyalty and a duty of care.[23] The duty of care includes a duty to provide investment advice that is in the best interest of the client. In order to provide such advice, an adviser must have a reasonable belief that the advice is in the client’s best interest based on the client’s objectives. For example, an adviser should consider whether investments are recommended only to those clients who can and are willing to tolerate the risks, and should conduct a reasonable investigation into the investment sufficient not to base its advice on materially inaccurate or incomplete information. Accordingly, investment advisers that are recommending investments in emerging markets may want to consider, as part of their due diligence, whether there are limitations on the quality or availability of financial information with respect to these investments, as well as possible limitations on investors’ legal remedies along the lines of those discussed above. Investment advisers should also consider the effect of market closures on their clients’ investments and ability to gain access to their assets.
In addition, mutual funds, exchange-traded funds and other registered investment companies are required to disclose their principal risks in the fund’s prospectus and summary prospectus. These risks will depend on the fund’s investment objective(s), holdings, investment strategies and structure.[24] Private fund advisers also must state all material facts necessary to make the statements made to any investor or prospective investor in the fund not misleading.[25] If a fund invests or may consider investing a significant portion of its assets in emerging markets, it should disclose those principal risks related to the quality or availability of the financial information of such investments, impact of any potential market closures and other related risks.
Closing
It is important that investors, funds, financial professionals and index providers consider carefully the issues, risks and uncertainties associated with investing in emerging markets, including China, the world’s largest emerging market and second largest economy. In particular, protections similar to certain key elements of the U.S. regulatory regime may not exist in these markets and, as both a legal and practical matter, applicable regulations are more limited from an investor protection perspective. It is imperative that companies based in or with significant operations in these emerging markets, as well as their audit committees (if applicable) and auditors, each fulfill their responsibilities to (1) prepare and provide high-quality, reliable financial information and other disclosures, including through considerations of the circumstances and environment in which these companies operate and (2) provide accurate and complete risk disclosure, including with regard to the limited rights and remedies of U.S. authorities and investors.
This statement should not be viewed as an effort to restrict access to emerging market investments. Investor choice has long been a core component of our capital markets regulatory framework, and emerging market investments, including as a component of a diversified portfolio, have proven to be beneficial to many investors. The combination of (1) full and fair disclosure, (2) meaningful, principled oversight and enforcement and (3) broad investor choice, has made the U.S. capital markets the world’s deepest and most vibrant, benefiting investors, issuers and economic welfare domestically and globally. This statement reflects our commitment to preserving and promoting each component of that important and powerful combination.
[1] This statement represents the views of the Chairman, Chief Accountant and Directors of the Divisions of Corporation Finance and Investment Management of the U.S. Securities and Exchange Commission (“SEC” or “Commission”). It is not a rule, regulation, or statement of the SEC. The Commission has neither approved nor disapproved its content. This statement does not alter or amend applicable law and has no legal force or effect. This statement creates no new or additional obligations for any person.
This statement also expresses the views of the Public Company Accounting Oversight Board (“PCAOB”) Chairman William D. Duhnke III and does not necessarily reflect the views of the PCAOB, other PCAOB Board members, or PCAOB staff.
[2] See, e.g., U.S. Department of the Treasury, Federal Reserve Bank of New York and Board of Governors of the Federal Reserve System, U.S. Portfolio Holdings of Foreign Securities as of December 31, 2018 (October 2019), available athttps://ticdata.treasury.gov/Publish/shca2018_report.pdf; Bureau of Economic Analysis, U.S. Department of Commerce, Direct Investment by Country and Industry, 2018 (July 2019), available athttps://www.bea.gov/system/files/2019-07/fdici0719.pdf; M. Szmigiera, Direct investment position of the United States abroad from 2000 to 2018 (September 2019) available athttps://www.statista.com/statistics/188571/united-states-direct-investments-abroad-since-2000/.
[3] See, e.g., McKinsey & Company, Global growth, local roots: The shift toward emerging markets (August 2017), available at https://www.mckinsey.com/business-functions/operations/our-insights/global-growth-local-roots-the-shift-toward-emerging-markets; McKinsey & Company, Manufacturing the future: The next era of global growth and innovation (November 2012), available at https://time.com/wp-content/uploads/2015/03/manufacturing-the-future.pdf.
[4] China has the second largest economy in the world, with a reported gross domestic product of $14.3 trillion in 2019. See, e.g., Elvis Picardo, Why Wall Street Is a Key Player in the World's Economy (Feb. 5, 2020), available athttps://www.investopedia.com/articles/investing/100814/wall-streets-enduring-impact-economy.asp.
[5] See, e.g., SEC Office of Investor Education and Advocacy, Investor Bulletin: International Investing, available at https://www.sec.gov/reportspubs/investor-publications/investorpubsininvesthtm.html.
[6] Rules 13a-15(a) and 15d-15(a) of the Securities Exchange Act of 1934 (“Exchange Act”) (17 CFR 240.13a-15(a) and 17 CFR 240.15d-15(a), respectively) and Section 13(b)(2) of the Exchange Act (15 USC 78m(b)(2)).
[7] Paragraph .02 of AS No. 1001, Responsibilities and Functions of the Independent Auditor.
[8] Management responsibilities with respect to the financial statements of a registered investment company are similar, reflective of the different requirements for financial statement presentation and internal accounting controls. See Section 30(g) of the Investment Company Act of 1940 [15 USC 80a-29(g)].
[9] Rule 13a-13 of the Exchange Act (17 CFR 240.13a-13) and Rule 15d-13 of the Exchange Act (17 CFR 240.15d-13).
[10] Rule 13a-14 of the Exchange Act (17 CFR 240.13a-14) and Rule 15d-14 of the Exchange Act (17 CFR 240.15d-14). These rules require the certifying officers make certain certifications regarding disclosure controls and procedures and ICFR, and to also certify, among other things, that they have reviewed the Form 10-Q and that based on their knowledge: (i) the 10-Q does not contain any untrue statement of a material fact or omit to state a material fact necessary to make any statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the 10-Q; and (ii) the financial statements, and other financial information included in the 10-Q, fairly present in all material respects the financial condition, results of operations, changes in net assets and cash flows of the company as of, and for, the periods presented in the 10-Q.
[11] Form 6-K under the Exchange Act (17 CFR 249.306).
[12] See, e.g.,SEC Chairman Jay Clayton,Statement on SEC Approval of the PCAOB’s New Auditor’s Reporting Standard(October 23, 2017),available athttps://www.sec.gov/news/public-statement/clayton-statement-pcaob-new-auditor-reporting-standard; SEC Chairman Jay Clayton, SEC Chief Accountant Sagar Teotia and SEC Division of Corporation Finance Director William Hinman, Statement on Role of Audit Committees in Financial Reporting and Key Reminders Regarding Oversight Responsibilities (December 30, 2019), available at https://www.sec.gov/news/public-statement/statement-role-audit-committees-financial-reporting.
[13] Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, 116 Stat. 745 (2002).
[14] See, e.g.,SEC Chairman Jay Clayton,Statement at Open Meeting on Proposed Amendments to Sarbanes-Oxley 404(b) Accelerated Filer Definition (May 9, 2019), available athttps://www.sec.gov/news/public-statement/statement-clayton-050919; SEC Chairman Jay Clayton, Statement on SEC Approval of the PCAOB’s New Auditor’s Reporting Standard(October 23, 2017), available at https://www.sec.gov/news/public-statement/clayton-statement-pcaob-new-auditor-reporting-standard; SEC Chief Accountant Sagar Teotia, Statement in Connection with the 2019 AICPA Conference on Current SEC and PCAOB Developments(December 9, 2019),available athttps://www.sec.gov/news/speech/teotia-speech-2019-aicpa-conference.
[15] To further strengthen our financial reporting system, the PCAOB oversees the audits of U.S.-listed companies, registered investment companies and SEC-registered brokers and dealers with a mission of protecting investors and furthering the public interest in the preparation of informative, accurate and independent audit reports. PCAOB inspections are a key component of our regulatory efforts to enhance the quality of financial reporting and promote audit quality. See PCAOB, Mission, Vision, and Values, available athttps://pcaobus.org/About/History/Pages/mission-vision-values.aspx.
[16] See, e.g., Statement on the Vital Role of Audit Quality and Regulatory Access to Audit and Other Information Internationally—Discussion of Current Information Access Challenges with Respect to U.S.-listed Companies with Significant Operations in China(December 7, 2018),available athttps://www.sec.gov/news/public-statement/statement-vital-role-audit-quality-and-regulatory-access-audit-and-other.
[17] See PCAOB, International Oversight and Cross-Border Cooperation, available at https://pcaobus.org/International; PCAOB, Public Companies that are Audit Clients of PCAOB-Registered Firms from Non-U.S. Jurisdictions where the PCAOB is Denied Access to Conduct Inspections, available athttps://pcaobus.org/International/Inspections/Pages/IssuerClientsWithoutAccess.aspx; PCAOB, China-based Referred Work, available athttps://pcaobus.org/International/Pages/China-Referred-Work.aspx.
[18] See Item 105 of Regulation S-K (17 CFR 229.105) (requiring “a discussion of the most significant factors that make an investment in the registrant or offering speculative or risky”).
[19] SeePress Release,SEC Chairman Clayton, PCAOB Chairman Duhnke, and Members of SEC Staff Meet With Auditing Firm Representatives to Discuss Audit Quality in Emerging Economies and Markets(November 4, 2019),available at https://www.sec.gov/news/press-release/2019-228; SEC Chairman Jay Clayton, SEC Division of Corporation Finance Director Bill Hinman, SEC Chief Accountant Sagar Teotia, and PCAOB Chairman William D. Duhnke III,Statement on Continued Dialogue with Audit Firm Representatives on Audit Quality in China and Other Emerging Markets; Coronavirus—Reporting Considerations and Potential Relief(February 19, 2020), available at https://www.sec.gov/news/public-statement/statement-audit-quality-china-2020-02-19; SEC Chief Accountant Sagar Teotia, Statement on the Importance of High-Quality Financial Reporting in Light of the Significant Impacts of COVID-19 (April 3, 2020) available at https://www.sec.gov/news/public-statement/statement-teotia-financial-reporting-covid-19-2020-04-03.
[20] See Article 177 of the 2020 Revised Chinese Securities Law, which provides, among other things, that without the approval of its securities regulator and various components of the Chinese government, no entity or individual in China may provide documents and information relating to securities business activities to overseas regulators.
[21] See Item 105 of Regulation S-K (17 CFR 229.105). See also Rule 408 of the Securities Act of 1933 (17 CFR 230.408), Rule 421 of the Securities Act of 1933 (17 CFR 230.421) and Rule 12b-20 of the Exchange Act (17 CFR 240.12b-20).
[22] See, e.g., Form N-1A, Gen’l. Instr. B.4.(c)., Items 4(b) and 9(c); Rule 421 under the Securities Act (17 CFR 230.421).
[23] Commission Interpretation Regarding Standard of Conduct for Investment Advisers, Investment Advisers Act Release No. 5248 (June 5, 2019).
[24] Accounting and Disclosure Information No. 2019-08, Improving Principal Risks Disclosure, available athttps://www.sec.gov/investment/accounting-and-disclosure-information/principal-risks/adi-2019-08-improving-principal-risks-disclosure.
[25] Rule 206(4)-8(a)(1) of the Advisers Act (17 CFR 275.206(4)-8(a)(1)).
