罕见!美证监会主席联名要求避买中概股

2020年4月23日 23:51
來源:香港奇点财经

奇点财经4月23日报道 – 特约记者 李大卫 发自美国

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等五位官员的署名文章,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,一方面是很大程度上依赖当地有关机构,而这些机构在另一方面又受到本国政策方面的制约。

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。周三,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。我们要提醒的是,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。”

奇点财经4月13日曾发文, 提醒中国企业关注美议员针对中概股推出的《公平法案》和《TSP法案》, 美国鹰派议员和部分前官员正努力说服特朗普政府, 要求所有在美国交易的中国公司,必须和其他国家一样遵守美国法规,保护美国人免受中企财务诈骗; 并且要求美国联邦雇员退休金计划停止投资中国企业股票。

《香港国际金融学会评论》主编,香港纵横资产管理有限公司Deputy CEO陈宜飚同时间也在奇点财经发文, 继瑞幸咖啡之后,爱奇艺、好未来等中概股相继收到做空机构的“关注”,加之疫情的影响,中概股的投资者担忧,在美国上市的中国公司或迎来史上最严格的审查阶段。他提醒, 面临美国两重大法案夹击, 中概股企业应主动提升ESG管治水平

美国SEC、PCAOB发联合声明

美国证监会(SEC)四名官员以及美国公众公司会计监督委员会(PCAOB)主席William Duhnke周二(4月21日)联合发布声明,警告投资人应提防新兴市场、特别是中国企业的财务状况风险

声明措辞强烈, 称”包括中国在内的许多新兴市场,披露信息不完整或具有误导性的风险很大”,投资者如果受到损害,寻求追索的机会非常低。”非美国司法管辖区缺乏充分的投资者保护标准,而美国对此几乎没有控制权。”

监管机构还强调了一个长期存在的冲突点:美国主要监管机构无法审查中国审计机构为在美上市企业开展的审计工作。报导称,对中国会计师事务所进行审查的问题可追溯到十多年前,这也是美中之间紧张点之一。虽然美国监管机构可以检查大多数国家或地区为基础的审计文件,但中国的限制妨碍美国调查或检查中国审计师错误、渎职的行为。

上述监管机构在周二的声明中表示,投资者应特别关注PCAOB在中国盲区的潜在影响。声明补充,就算签署审计报告的审计师不在中国,如果该公司在中国有业务,投资人就要想想是否有很大部分的审计工作是由中国公司进行的。PCAOB还在其网站上列出无法检查审计师的公司列表

2018年12月,Clayton和Duhnke也曾联合发表过声明,称美国监管机构在监查在美上市的中国上市公司的财务报告方面「面临重大挑战」。他们指出224家(总市值达1.8万亿美元)公司的审计机构中,有213家来自中国或香港,这对美国监管机构构成障碍。

美国证券交易委员会发布针对中概股的声明(全文)

Emerging Market Investments Entail Significant Disclosure, Financial Reporting and Other Risks; Remedies are Limited

by
SEC Chairman Jay Clayton
PCAOB Chairman William D. Duhnke III
SEC Chief Accountant Sagar Teotia
SEC Division of Corporation Finance Director William Hinman
SEC Division of Investment Management Director Dalia Blass
April 21, 2020

The PCAOB’s Inability to Inspect Audit Work Papers in China Continues

Introduction[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)).