PCAOB Archives - Securities Law Blog

Introducing The OTCID

OTC Markets has announced the launch of a new market tier. Effective July 2025, Pink Current will become the OTCID, a basic reporting market requiring companies to meet minimal current information disclosures and provide management certifications. OTC Markets will still maintain the Pink Limited and Expert Market tiers for companies that do not qualify for the OTCID. OTC Markets has not yet published all of the requirements for the OTCID, but I suspect they will be similar to the existing Pink Current, with the addition of the management certifications.

I support the change and new branding opportunity. OTC Markets have struggled in recent years, primarily as a result of an inability for OTC Markets traded companies to obtain institutional financing or underwriter/placement agent banker support. Forever the optimist, the change could be just what is needed to revitalize the OTC Markets as a venture market place for U.S. micro-cap companies.

OTCID

Currently, the OTC Markets divides issuers into

November 26, 2024

SEC Publishes New Sample Comment Letter To China Based Companies

Continuing its concerns over the quality of disclosures from companies based in or with a majority of their operations in the People’s Republic of China, in July 2023, the SEC’s Division of Corporation Finance published yet another sample comment letter to China-based companies.

Back in April 2020, former SEC Chairman Jay Clayton and a group of senior SEC and PCAOB officials issued a joint statement warning about the risks of investing in emerging markets, especially China, including companies from those markets that are accessing the U.S. capital markets (see HERE). Before that, in December 2018, Chair Clayton, SEC Chief Accountant Wes Bricker and PCAOB Chairman William D. Duhnke III issued a similar cautionary statement, also focusing on China (see HERE).

September 26, 2023

The SEC Drafts Strategic Plan For Fiscal Years 2022-2026

On August 24, 2022, the SEC released its draft strategic plan for the fiscal years 2022 to 2026 and sought public comment on same. The three primary goals set forth in the plan include: (i) protecting working families against fraud, manipulation, and misconduct; (ii) developing and implementing a robust regulatory framework that keeps pace with evolving markets, business models, and technologies; and (iii) supporting a skilled workforce that is diverse, equitable, inclusive, and is fully equipped to advance agency objectives.

To achieve these goals, the SEC intends to use of market and industry data to prevent, detect, and prosecute improper behavior. The SEC also seeks to modernize design, delivery, and content of disclosures to investors so they can access consistent, comparable, and material information while making investment decisions.

These statements are very broad, but even at face value, the different focus of the SEC as compared to the last plan published in 2018 is clear. In 2018 the three primary

November 1, 2022

SEC Chair Gary Gensler Testifies To Senate Banking Committee

On September 15, 2022, SEC Chairman Gary Gensler gave his yearly testimony to the U.S. Senate Committee on Banking, Housing and Urban Affairs highlighting his priorities for the SEC. This year Mr. Gensler kept his testimony extremely short, allowing more time for questions and answers.

Last year, Chair Gensler gave lengthy testimony on his four key priorities: (i) market structure; (ii) predictive data analytics; (iii) issuers and issuer disclosure (including SPACs); and (iv) funds and investment management (see HERE).

This year Gensler again focused on market structure as a priority, noting that many aspects of the national market system rules have not been updated since 2005. Though not using the same topic subtitles as last year, SPACs, insider trading and investment funds remain top of list, as does crypto. Other priorities include shorting the settlement cycle to T+1, increasing central clearing in the treasury markets (rules were recently proposed), cybersecurity, and private funds.

Repeating his mantra, Chair

October 11, 2022

Final Rules On The Foreign Companies Accountable Act; PCAOB Reached Deal WIth China And Hong Kong – Part III

The Holding Foreign Companies Accountable Act (“HFCA”) was adopted on December 18, 2020, requiring both the SEC and the PCAOB to adopt rules and procedures implementing its provisions. The HFCA requires foreign-owned issuers to certify that the PCAOB has been able to audit specified reports and inspect their audit firm within the last three years. If the PCAOB is unable to inspect the company’s public accounting firm for three consecutive years, the company’s securities are banned from trading on a national exchange.

As part of the HFCA’s implementation, on November 5, 2021, the SEC approved PCAOB Rule 6100 establishing a framework for the PCAOB’s determination that it is unable to inspect or investigate completely registered public accounting firms located in foreign jurisdictions because of a position taken by an authority in that jurisdiction (see HERE) On December 2, 2021, the SEC adopted amendments to finalize rules implementing the submission and disclosure requirements in the HFCA (see HERE) and

October 4, 2022

Final Rules On The Foreign Companies Accountable Act; PCAOB Reached Deal WIth China And Hong Kong – Part II

As part of the HFCA’s implementation, on November 5, 2021, the SEC approved PCAOB Rule 6100 establishing a framework for the PCAOB’s determination that it is unable to inspect or investigate completely registered public accounting firms located in foreign jurisdictions because of a position taken by an authority in that jurisdiction (see HERE.) On December 2, 2021, the SEC adopted amendments to finalize rules implementing the submission and disclosure requirements in the HFCA and published a sample

September 27, 2022

Final Rules On The Foreign Companies Accountable Act; PCAOB Reached Deal WIth China And Hong Kong – Part I

As part of the HFCA’s implementation, on November 5, 2021, the SEC approved PCAOB Rule 6100 establishing a framework for the PCAOB’s determination that it is unable to inspect or investigate completely registered public accounting firms located in foreign jurisdictions because of a position taken by an authority in that jurisdiction (see HERE .) On December 2, 2021, the SEC adopted amendments to finalize rules implementing the submission and disclosure requirements in the HFCA and published a sample

September 20, 2022

SEC Affirms PCAOB Rules Implementing The Holding Foreign Companies Accountable Act

On November 5, 2021, as part of the implementation of the Holding Foreign Companies Accountable Act (“HFCA”), the SEC approved PCAOB Rule 6100. Rule 6100 establishes a framework for the PCAOB’s determination that it is unable to inspect or investigate completely registered public accounting firms located in foreign jurisdictions because of a position taken by an authority in that jurisdiction. The HFCA was adopted on December 18, 2020 and requires foreign-owned issuers to certify that the PCAOB has been able to audit specified reports and inspect their audit firm within the last three years. If the PCAOB is unable to inspect the company’s public accounting firm for three consecutive years, the company’s securities are banned from trading on a national exchange.

The Sarbanes-Oxley Act of 2002 (“SOX”) mandates that the PCAOB inspect registered public accounting firms in both the United States and in foreign jurisdictions and investigate potential statutory, rule, and professional standards violations committed by such firms and

November 30, 2021

Nasdaq Board Diversity Proposal

Nasdaq has long been a proponent of environmental, social and governance (ESG) disclosures and initiatives, having published a guide for listed companies on the subject over six years ago (see HERE). In December 2020, Nasdaq took it a step further and proposed a rule which would require listed companies to have at least one woman on their boards, in addition to a director who is a racial minority or one who self-identifies as lesbian, gay, bisexual, transgender or queer. Companies that don’t meet the standard would be required to justify their decision to remain listed on Nasdaq. To help facilitate the proposed rule, Nasdaq has also proposed to offer a complimentary board recruiting solution. A final decision on the proposals is expected this summer.

The SEC recently extended the consideration period and will either approve or disapprove the proposal by August 8, 2021. The newest Regulatory Flex Agenda which was published last week and will be a topic

July 13, 2021

OTCQB And OTCQX Rule Changes

Effective October 1, 2020, the OTCQB and OTCQX tiers of OTC Markets have instituted amendments to their rules, including an increase in fees.

The OTC Markets divide issuers into three (3) levels of quotation marketplaces: OTCQX, OTCQB and OTC Pink Open Market. The OTC Pink Open Market, which involves the highest-risk, highly speculative securities, is further divided into three tiers: Current Information, Limited Information and No Information. Companies trading on the OTCQX, OTCQB and OTC Pink Current Information tiers of OTC Markets have the option of reporting directly to OTC Markets under its Alternative Reporting Standards. The Alternative Reporting Standards are more robust for the OTCQB and OTCQX in that they require audited financial statements prepared in accordance with U.S. GAAP and audited by a PCAOB qualified auditor in the same format as would be included in SEC registration statements and reports.

As an aside, companies that report to the SEC under Regulation A and foreign companies that

December 15, 2020

1700 Palm Beach Lakes Blvd, Suite 820

(800) 341-2684

Contact us

MAKE VALUED ALLIANCES

PCAOB

Introducing The OTCID

SEC Publishes New Sample Comment Letter To China Based Companies

The SEC Drafts Strategic Plan For Fiscal Years 2022-2026

SEC Chair Gary Gensler Testifies To Senate Banking Committee

Final Rules On The Foreign Companies Accountable Act; PCAOB Reached Deal WIth China And Hong Kong – Part III

Final Rules On The Foreign Companies Accountable Act; PCAOB Reached Deal WIth China And Hong Kong – Part II

Final Rules On The Foreign Companies Accountable Act; PCAOB Reached Deal WIth China And Hong Kong – Part I

SEC Affirms PCAOB Rules Implementing The Holding Foreign Companies Accountable Act

Nasdaq Board Diversity Proposal

Categories

Contact Information

Recent Posts

Court Overrules Nasdaq Board Diversity Rule

Court Strikes Down Recent Changes To Definition Of A Dealer

Understanding the Shareholder Meeting Timeline

Introducing The OTCID

Legal Resources

Tweets

DEVELOPED AND MANAGED BY

Featured On

Contact Author

Have a Question for Laura Anthony?