Public Company Accounting Oversight Board; Notice of Filing of Proposed Rules on Amendments to Board Rule Governing Determinations Under the Holding Foreign Companies Accountable Act, 20002-20004 [2023-06961]

Download as PDF 20002 Federal Register / Vol. 88, No. 64 / Tuesday, April 4, 2023 / Notices that have characteristics different from existing actively-managed and index ETFs and would introduce additional competition among various ETF products to the benefit of investors. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to section 19(b)(3)(A)(iii) of the Act 30 and subparagraph (f)(6) of Rule 19b–4 thereunder.31 A proposed rule change filed under Rule 19b–4(f)(6) 32 normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b–4(f)(6)(iii),33 the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Commission believes that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest because the proposal does not raise any new or novel issues. Accordingly, the Commission hereby waives the 30-day operative delay and designates the proposal operative upon filing.34 At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such 30 15 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6) requires the Exchange to give the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. 32 17 CFR 240.19b–4(f)(6). 33 17 CFR 240.19b–4(f)(6)(iii). 34 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). ddrumheller on DSK120RN23PROD with NOTICES1 31 17 VerDate Sep<11>2014 19:41 Apr 03, 2023 Jkt 259001 action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NYSEARCA–2023–27 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSEARCA–2023–27. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s internet website (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available PO 00000 Frm 00100 Fmt 4703 Sfmt 4703 publicly. All submissions should refer to File Number SR–NYSEARCA–2023– 27 and should be submitted on or before April 25, 2023. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.35 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2023–06897 Filed 4–3–23; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–97223; File No. PCAOB– 2023–01] Public Company Accounting Oversight Board; Notice of Filing of Proposed Rules on Amendments to Board Rule Governing Determinations Under the Holding Foreign Companies Accountable Act March 30, 2023. Pursuant to Section 107(b) of the Sarbanes-Oxley Act of 2002 (‘‘SarbanesOxley’’ or the ‘‘Act’’), notice is hereby given that on March 29, 2023, the Public Company Accounting Oversight Board (the ‘‘Board’’ or the ‘‘PCAOB’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’ or the ‘‘SEC’’) the proposed rules described in items I and II below, which items have been prepared by the Board. The Commission is publishing this notice to solicit comments on the proposed rules from interested persons. I. Board’s Statement of the Terms of Substance of the Proposed Rules On March 28, 2023, the Board adopted amendments to PCAOB Rule 6100, Board Determinations Under the Holding Foreign Companies Accountable Act (collectively, the ‘‘proposed rules’’). The text of the proposed rules appears in Exhibit A to the SEC Filing Form 19b–4 and is available on the Board’s website at https://pcaobus.org/about/rulesrulemaking/rulemaking-dockets/docket050 and at the Commission’s Public Reference Room. II. Board’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rules In its filing with the Commission, the Board included statements concerning the purpose of, and basis for, the proposed rules. The text of these statements may be examined at the places specified in Item IV below. The Board has prepared summaries, set forth 35 17 E:\FR\FM\04APN1.SGM CFR 200.30–3(a)(12). 04APN1 Federal Register / Vol. 88, No. 64 / Tuesday, April 4, 2023 / Notices in sections A, B, and C below, of the most significant aspects of such statements. A. Board’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rules (a) Purpose ddrumheller on DSK120RN23PROD with NOTICES1 Sarbanes-Oxley mandates that the Board inspect registered public accounting firms and investigate possible statutory, rule, and professional standards violations committed by those firms and their associated persons. That mandate applies with equal force to the Board’s oversight of registered firms in the United States and in foreign jurisdictions.1 In December 2020, recognizing the obstacles the Board has faced when attempting to conduct inspections and investigations in certain foreign jurisdictions, Congress enacted the Holding Foreign Companies Accountable Act (‘‘HFCAA’’), which amended Sarbanes-Oxley.2 The HFCAA required that the Board determine whether it is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.3 The HFCAA also mandates that, after the Board makes such a determination, the Commission shall require covered issuers 4 that retain such firms to make certain disclosures in their annual reports and, eventually, if certain conditions persist, shall prohibit trading in those issuers’ securities.5 Following public comment, the Board adopted PCAOB Rule 6100, Board Determinations Under the Holding Foreign Companies Accountable Act, to establish a framework for the Board to make its determinations under the HFCAA.6 Rule 6100 establishes the manner of the Board’s determinations; the factors the Board will evaluate and the documents and information it will 1 See, e.g., Section 106(a)(1) of Sarbanes-Oxley, 15 U.S.C. 7216(a)(1). 2 Public Law 116–222, 134 Stat. 1063 (Dec. 18, 2020). 3 See Section 104(i)(2)(A) of Sarbanes-Oxley, 15 U.S.C. 7214(i)(2)(A). 4 See Section 104(i)(1)(A) of Sarbanes-Oxley, 15 U.S.C. 7214(i)(1)(A) (defining ‘‘covered issuer’’). 5 See generally Holding Foreign Companies Accountable Act Disclosure, SEC Release No. 34– 93701 (Dec. 2, 2021). 6 See Rule Governing Board Determinations Under the Holding Foreign Companies Accountable Act, PCAOB Rel. No. 2021–004 (Sept. 22, 2021); see also Public Company Accounting Oversight Board; Order Granting Approval of Proposed Rule Governing Board Determinations Under the Holding Foreign Companies Accountable Act, SEC Release No. 34–93527 (Nov. 4, 2021). VerDate Sep<11>2014 19:41 Apr 03, 2023 Jkt 259001 consider when assessing whether a determination is warranted; the form, public availability, effective date, and duration of such determinations; and the process by which the Board will reaffirm, modify, or vacate any such determinations. On December 29, 2022, the President signed into law the Consolidated Appropriations Act, 2023 (‘‘the 2023 Appropriations Act’’),7 amending certain provisions of Sarbanes-Oxley that relate to Board determinations under the HFCAA. As a result, the Board is amending Rule 6100 to conform to the 2023 Appropriations Act’s amendment of Section 104(i)(2)(A)(ii) of Sarbanes-Oxley.8 Amendments to Rule 6100(a). Consistent with the HFCAA,9 Rule 6100(a), as originally adopted, provided that a Board determination regarding its inability to inspect or investigate completely a registered public accounting firm could be based only on positions taken by authorities in the foreign jurisdiction where the firm was headquartered (for purposes of Rule 6100(a)(1)) or in a foreign jurisdiction where the firm had an office (for purposes of Rule 6100(a)(2)).10 Therefore, if the Board were unable to inspect or investigate a firm completely because of a position taken by an authority in a foreign jurisdiction where the firm neither was headquartered nor had an office, a determination under the HFCAA as to the firm could not be made. The 2023 Appropriations Act amends Section 104(i)(2)(A)(ii) of SarbanesOxley to allow the Board to make a determination as to a firm located in one 7 See Public Law 117–328 (Dec. 29, 2022). other amendments to Sarbanes-Oxley in the 2023 Appropriations Act relate to the timetable for trading prohibitions. See Section 301 of Division AA of the 2023 Appropriations Act (reducing, from three years to two years, the timetable for trading prohibitions set forth in Section 104(i)(3) of Sarbanes-Oxley). Because Rule 6100 does not address the timetable for such prohibitions, no related changes to Rule 6100 are necessary. 9 See HFCAA § 2(i)(2)(A)(ii), 15 U.S.C. 7214(i)(2)(A)(ii) (providing that a Board determination as to a registered firm can be based only on a position taken by an authority in ‘‘the foreign jurisdiction described in clause (i),’’ that is, the foreign jurisdiction where a branch or office of the firm is located). 10 See PCAOB Rule 6100(a)(1) (pre-amendment) (‘‘The Board may determine that it is unable to inspect or investigate completely registered public accounting firms headquartered in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.’’) (emphasis added); PCAOB Rule 6100(a)(2) (pre-amendment) (‘‘The Board may determine that it is unable to inspect or investigate completely a registered public accounting firm that has an office that is located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.’’) (emphasis added). 8 The PO 00000 Frm 00101 Fmt 4703 Sfmt 4703 20003 foreign jurisdiction based on a position taken by an authority in a different foreign jurisdiction.11 The Board is amending Rule 6100(a)(1) and (a)(2) to effectuate that change by replacing ‘‘in that jurisdiction’’ with ‘‘in a foreign jurisdiction’’ at the end of both provisions. Amendments to Rule 6100(c) and (d). Relatedly, because future Board determinations could implicate two foreign jurisdictions—one where the firm is located and another whose authorities are taking positions that render the Board unable to inspect or investigate completely—the Board is amending Rule 6100(c) and (d) to eliminate potentially ambiguous or confusing references to ‘‘the foreign jurisdiction.’’ Specifically, the Board is deleting ‘‘in the foreign jurisdiction or any political subdivision thereof’’ in Rule 6100(c)(1); is replacing ‘‘any relevant authority in the foreign jurisdiction’’ with ‘‘any relevant foreign authority’’ in Rule 6100(c)(2); is replacing ‘‘the foreign authority’s’’ with ‘‘any relevant foreign authority’s’’ in Rule 6100(c)(3); and is deleting ‘‘located in the foreign jurisdiction’’ in Rule 6100(d). Effective Date. The Board determined that the amendments to Rule 6100 take effect upon approval by the Commission. The effective date takes into consideration the statutory amendments to Sarbanes-Oxley and the limited, conforming nature of the changes to Rule 6100. (b) Statutory Basis The statutory basis for the proposed rules is Title I of the Act. B. Board’s Statement on Burden on Competition Not applicable. The amendments to Rule 6100 reflect the statutory amendment to Section 104(i)(2)(A)(ii) of Sarbanes-Oxley. C. Board’s Statement on Comments on the Proposed Rules Received From Members, Participants or Others The Board did not solicit written comments on the proposed rules. The amendments to Rule 6100 reflect the statutory amendment to Section 104(i)(2)(A)(ii) of Sarbanes-Oxley.12 11 See Section 301 of Division AA of the 2023 Appropriations Act (striking ‘‘the foreign jurisdiction described in clause (i)’’ and inserting ‘‘a foreign jurisdiction’’ in Section 104(i)(2)(A)(ii) of Sarbanes-Oxley). 12 The amendments to Rule 6100 do not require ‘‘mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements’’ of issuers, E:\FR\FM\04APN1.SGM Continued 04APN1 20004 Federal Register / Vol. 88, No. 64 / Tuesday, April 4, 2023 / Notices III. Date of Effectiveness of the Proposed Rules and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the Board consents, the Commission will: (A) by order approve or disapprove such proposed rules; or (B) institute proceedings to determine whether the proposed rules should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rules are consistent with the requirements of Title I of the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/pcaob.shtml); or • Send an email to rule-comments@ sec.gov. Please include PCAOB–2023– 01 on the subject line. ddrumheller on DSK120RN23PROD with NOTICES1 Paper Comments • Send paper comments in triplicate to Vanessa Countryman, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to PCAOB–2023–01. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s internet website (https://www.sec.gov/ rules/pcaob.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rules that are filed with the Commission, and all written communications relating to the proposed rules between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549–1090, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing will also be available for inspection and copying at the principal office of the PCAOB. All comments received will be posted without charge; we do not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to PCAOB–2023–01 and should be submitted on or before April 25, 2023. For the Commission by the Office of the Chief Accountant.13 Sherry R. Haywood, Assistant Secretary. VerDate Sep<11>2014 19:41 Apr 03, 2023 Jkt 259001 II. Description of Proposed Rule Change As described further below, the proposed rule change consists of new Proposed Rule G–46, as modified by Amendment No. 1, and amendments to Rule G–8. [FR Doc. 2023–06961 Filed 4–3–23; 8:45 am] A. Solicitor Municipal Advisor Activity BILLING CODE 8011–01–P There are two broad categories of municipal advisors—those that provide certain advice to or on behalf of a municipal entity or obligated person and those that undertake certain solicitations of a municipal entity or obligated person on behalf of certain third-party financial professionals.8 The first category of municipal advisors is often referred to as non-solicitor municipal advisors, while the latter is sometimes referred to as solicitors.9 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–97218; File No. SR–MSRB– 2023–02] Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 1, To Create New MSRB Rule G–46, on Duties of Solicitor Municipal Advisors, and To Amend MSRB Rule G–8, on Books and Records March 29, 2023. I. Introduction On January 31, 2023, the Municipal Securities Rulemaking Board (‘‘MSRB’’ or ‘‘Board’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Exchange Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to create a new rule, MSRB Rule G–46 (‘‘Rule G–46’’), on duties of solicitor municipal advisors (‘‘Proposed Rule G–46’’) and amend MSRB Rule G– 8 (‘‘Rule G–8’’), on books and records (‘‘Proposed Amended Rule G–8’’) (together, the ‘‘proposed rule change’’). The proposed rule change was published for comment in the Federal Register on February 14, 2023.3 The public comment period closed on March 13 17 nor do they impose any ‘‘additional requirements’’ on auditors. Section 103(a)(3)(C) of Sarbanes-Oxley. Accordingly, the Board has concluded that Section 103(a)(3)(C) of Sarbanes-Oxley does not apply to this rulemaking. 7, 2023.4 The Commission received one comment letter on the proposed rule change.5 On March 23, 2023, the MSRB responded to the comment letter 6 and filed Amendment No. 1 to the proposed rule change (‘‘Amendment No. 1’’).7 The Commission is publishing this notice to solicit comments on Amendment No. 1 to the proposed rule change from interested parties and is approving the proposed rule change, as modified by Amendment No. 1, on an accelerated basis. CFR 200.30–11(b)(1) and (3). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 Release No. 34–96842 (February 8, 2023), 88 FR 9560 (February 14, 2023) (File No. MSRB–2023–02) (the ‘‘Notice’’). 1 15 PO 00000 Frm 00102 Fmt 4703 Sfmt 4703 4 The comment letter received on the proposed rule change is available on the Commission’s website at https://www.sec.gov. 5 See Letter to Secretary, from Leslie Norwood, Managing Director and Associate General Counsel, Securities Industry and Financial Markets Association (‘‘SIFMA’’), dated March 7, 2023 (‘‘SIFMA Letter’’). 6 See Letter to Secretary, Commission, from Saliha Olgun, Interim Chief Regulatory Officer, MSRB, dated March 23, 2023 (‘‘Response Letter’’). 7 Id. As described in Amendment No. 1, the MSRB stated it proposed to amend the original proposed rule change to make a change directly responsive to the comments and two other technical changes. 8 Exchange Act Section 15B(e)(4) generally defines ‘‘municipal advisor’’ to mean a person (who is not a municipal entity or an employee of a municipal entity) that (i) provides advice to or on behalf of a municipal entity or obligated person with respect to municipal financial products or the issuance of municipal securities, including advice with respect to the structure, timing, terms, and other similar matters concerning such financial products or issues; or (ii) undertakes a solicitation of a municipal entity. Additionally, the SEC has interpreted the definition of ‘‘municipal advisor’’ to include a person who engages in the solicitation of an obligated person acting in the capacity of an obligated person. 15 U.S.C. 78o–4(e)(4). See also Release No. 34–70462 (September 20, 2013), 78 FR 67468 (November 12, 2013) (File No. S7–45–10) at 67469, n. 138, 408; 17 CFR 240.15Ba1–1(d)(1)(i). 9 Exchange Act Section 15B(e)(9) generally defines ‘‘solicitation of a municipal entity or obligated person’’ to mean a direct or indirect communication with a municipal entity or obligated person made by a person, for direct or indirect compensation, on behalf of a broker, dealer, municipal securities dealer, municipal advisor, or E:\FR\FM\04APN1.SGM 04APN1

Agencies

[Federal Register Volume 88, Number 64 (Tuesday, April 4, 2023)]
[Notices]
[Pages 20002-20004]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-06961]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-97223; File No. PCAOB-2023-01]


Public Company Accounting Oversight Board; Notice of Filing of 
Proposed Rules on Amendments to Board Rule Governing Determinations 
Under the Holding Foreign Companies Accountable Act

March 30, 2023.
    Pursuant to Section 107(b) of the Sarbanes-Oxley Act of 2002 
(``Sarbanes-Oxley'' or the ``Act''), notice is hereby given that on 
March 29, 2023, the Public Company Accounting Oversight Board (the 
``Board'' or the ``PCAOB'') filed with the Securities and Exchange 
Commission (the ``Commission'' or the ``SEC'') the proposed rules 
described in items I and II below, which items have been prepared by 
the Board. The Commission is publishing this notice to solicit comments 
on the proposed rules from interested persons.

I. Board's Statement of the Terms of Substance of the Proposed Rules

    On March 28, 2023, the Board adopted amendments to PCAOB Rule 6100, 
Board Determinations Under the Holding Foreign Companies Accountable 
Act (collectively, the ``proposed rules''). The text of the proposed 
rules appears in Exhibit A to the SEC Filing Form 19b-4 and is 
available on the Board's website at https://pcaobus.org/about/rules-rulemaking/rulemaking-dockets/docket-050 and at the Commission's Public 
Reference Room.

II. Board's Statement of the Purpose of, and Statutory Basis for, the 
Proposed Rules

    In its filing with the Commission, the Board included statements 
concerning the purpose of, and basis for, the proposed rules. The text 
of these statements may be examined at the places specified in Item IV 
below. The Board has prepared summaries, set forth

[[Page 20003]]

in sections A, B, and C below, of the most significant aspects of such 
statements.

A. Board's Statement of the Purpose of, and Statutory Basis for, the 
Proposed Rules

(a) Purpose
    Sarbanes-Oxley mandates that the Board inspect registered public 
accounting firms and investigate possible statutory, rule, and 
professional standards violations committed by those firms and their 
associated persons. That mandate applies with equal force to the 
Board's oversight of registered firms in the United States and in 
foreign jurisdictions.\1\
---------------------------------------------------------------------------

    \1\ See, e.g., Section 106(a)(1) of Sarbanes-Oxley, 15 U.S.C. 
7216(a)(1).
---------------------------------------------------------------------------

    In December 2020, recognizing the obstacles the Board has faced 
when attempting to conduct inspections and investigations in certain 
foreign jurisdictions, Congress enacted the Holding Foreign Companies 
Accountable Act (``HFCAA''), which amended Sarbanes-Oxley.\2\ The HFCAA 
required that the Board determine whether it is unable to inspect or 
investigate completely registered public accounting firms located in a 
foreign jurisdiction because of a position taken by one or more 
authorities in that jurisdiction.\3\ The HFCAA also mandates that, 
after the Board makes such a determination, the Commission shall 
require covered issuers \4\ that retain such firms to make certain 
disclosures in their annual reports and, eventually, if certain 
conditions persist, shall prohibit trading in those issuers' 
securities.\5\
---------------------------------------------------------------------------

    \2\ Public Law 116-222, 134 Stat. 1063 (Dec. 18, 2020).
    \3\ See Section 104(i)(2)(A) of Sarbanes-Oxley, 15 U.S.C. 
7214(i)(2)(A).
    \4\ See Section 104(i)(1)(A) of Sarbanes-Oxley, 15 U.S.C. 
7214(i)(1)(A) (defining ``covered issuer'').
    \5\ See generally Holding Foreign Companies Accountable Act 
Disclosure, SEC Release No. 34-93701 (Dec. 2, 2021).
---------------------------------------------------------------------------

    Following public comment, the Board adopted PCAOB Rule 6100, Board 
Determinations Under the Holding Foreign Companies Accountable Act, to 
establish a framework for the Board to make its determinations under 
the HFCAA.\6\ Rule 6100 establishes the manner of the Board's 
determinations; the factors the Board will evaluate and the documents 
and information it will consider when assessing whether a determination 
is warranted; the form, public availability, effective date, and 
duration of such determinations; and the process by which the Board 
will reaffirm, modify, or vacate any such determinations.
---------------------------------------------------------------------------

    \6\ See Rule Governing Board Determinations Under the Holding 
Foreign Companies Accountable Act, PCAOB Rel. No. 2021-004 (Sept. 
22, 2021); see also Public Company Accounting Oversight Board; Order 
Granting Approval of Proposed Rule Governing Board Determinations 
Under the Holding Foreign Companies Accountable Act, SEC Release No. 
34-93527 (Nov. 4, 2021).
---------------------------------------------------------------------------

    On December 29, 2022, the President signed into law the 
Consolidated Appropriations Act, 2023 (``the 2023 Appropriations 
Act''),\7\ amending certain provisions of Sarbanes-Oxley that relate to 
Board determinations under the HFCAA. As a result, the Board is 
amending Rule 6100 to conform to the 2023 Appropriations Act's 
amendment of Section 104(i)(2)(A)(ii) of Sarbanes-Oxley.\8\
---------------------------------------------------------------------------

    \7\ See Public Law 117-328 (Dec. 29, 2022).
    \8\ The other amendments to Sarbanes-Oxley in the 2023 
Appropriations Act relate to the timetable for trading prohibitions. 
See Section 301 of Division AA of the 2023 Appropriations Act 
(reducing, from three years to two years, the timetable for trading 
prohibitions set forth in Section 104(i)(3) of Sarbanes-Oxley). 
Because Rule 6100 does not address the timetable for such 
prohibitions, no related changes to Rule 6100 are necessary.
---------------------------------------------------------------------------

    Amendments to Rule 6100(a). Consistent with the HFCAA,\9\ Rule 
6100(a), as originally adopted, provided that a Board determination 
regarding its inability to inspect or investigate completely a 
registered public accounting firm could be based only on positions 
taken by authorities in the foreign jurisdiction where the firm was 
headquartered (for purposes of Rule 6100(a)(1)) or in a foreign 
jurisdiction where the firm had an office (for purposes of Rule 
6100(a)(2)).\10\ Therefore, if the Board were unable to inspect or 
investigate a firm completely because of a position taken by an 
authority in a foreign jurisdiction where the firm neither was 
headquartered nor had an office, a determination under the HFCAA as to 
the firm could not be made.
---------------------------------------------------------------------------

    \9\ See HFCAA Sec.  2(i)(2)(A)(ii), 15 U.S.C. 7214(i)(2)(A)(ii) 
(providing that a Board determination as to a registered firm can be 
based only on a position taken by an authority in ``the foreign 
jurisdiction described in clause (i),'' that is, the foreign 
jurisdiction where a branch or office of the firm is located).
    \10\ See PCAOB Rule 6100(a)(1) (pre-amendment) (``The Board may 
determine that it is unable to inspect or investigate completely 
registered public accounting firms headquartered in a foreign 
jurisdiction because of a position taken by one or more authorities 
in that jurisdiction.'') (emphasis added); PCAOB Rule 6100(a)(2) 
(pre-amendment) (``The Board may determine that it is unable to 
inspect or investigate completely a registered public accounting 
firm that has an office that is located in a foreign jurisdiction 
because of a position taken by one or more authorities in that 
jurisdiction.'') (emphasis added).
---------------------------------------------------------------------------

    The 2023 Appropriations Act amends Section 104(i)(2)(A)(ii) of 
Sarbanes-Oxley to allow the Board to make a determination as to a firm 
located in one foreign jurisdiction based on a position taken by an 
authority in a different foreign jurisdiction.\11\ The Board is 
amending Rule 6100(a)(1) and (a)(2) to effectuate that change by 
replacing ``in that jurisdiction'' with ``in a foreign jurisdiction'' 
at the end of both provisions.
---------------------------------------------------------------------------

    \11\ See Section 301 of Division AA of the 2023 Appropriations 
Act (striking ``the foreign jurisdiction described in clause (i)'' 
and inserting ``a foreign jurisdiction'' in Section 104(i)(2)(A)(ii) 
of Sarbanes-Oxley).
---------------------------------------------------------------------------

    Amendments to Rule 6100(c) and (d). Relatedly, because future Board 
determinations could implicate two foreign jurisdictions--one where the 
firm is located and another whose authorities are taking positions that 
render the Board unable to inspect or investigate completely--the Board 
is amending Rule 6100(c) and (d) to eliminate potentially ambiguous or 
confusing references to ``the foreign jurisdiction.'' Specifically, the 
Board is deleting ``in the foreign jurisdiction or any political 
subdivision thereof'' in Rule 6100(c)(1); is replacing ``any relevant 
authority in the foreign jurisdiction'' with ``any relevant foreign 
authority'' in Rule 6100(c)(2); is replacing ``the foreign 
authority's'' with ``any relevant foreign authority's'' in Rule 
6100(c)(3); and is deleting ``located in the foreign jurisdiction'' in 
Rule 6100(d).
    Effective Date. The Board determined that the amendments to Rule 
6100 take effect upon approval by the Commission. The effective date 
takes into consideration the statutory amendments to Sarbanes-Oxley and 
the limited, conforming nature of the changes to Rule 6100.
(b) Statutory Basis
    The statutory basis for the proposed rules is Title I of the Act.

B. Board's Statement on Burden on Competition

    Not applicable. The amendments to Rule 6100 reflect the statutory 
amendment to Section 104(i)(2)(A)(ii) of Sarbanes-Oxley.

C. Board's Statement on Comments on the Proposed Rules Received From 
Members, Participants or Others

    The Board did not solicit written comments on the proposed rules. 
The amendments to Rule 6100 reflect the statutory amendment to Section 
104(i)(2)(A)(ii) of Sarbanes-Oxley.\12\
---------------------------------------------------------------------------

    \12\ The amendments to Rule 6100 do not require ``mandatory 
audit firm rotation or a supplement to the auditor's report in which 
the auditor would be required to provide additional information 
about the audit and the financial statements'' of issuers, nor do 
they impose any ``additional requirements'' on auditors. Section 
103(a)(3)(C) of Sarbanes-Oxley. Accordingly, the Board has concluded 
that Section 103(a)(3)(C) of Sarbanes-Oxley does not apply to this 
rulemaking.

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[[Page 20004]]

III. Date of Effectiveness of the Proposed Rules and Timing for 
Commission Action

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the Board consents, the Commission will:
    (A) by order approve or disapprove such proposed rules; or
    (B) institute proceedings to determine whether the proposed rules 
should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed 
rules are consistent with the requirements of Title I of the Act. 
Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/pcaob.shtml); or
     Send an email to [email protected]. Please include 
PCAOB-2023-01 on the subject line.

Paper Comments

     Send paper comments in triplicate to Vanessa Countryman, 
Secretary, Securities and Exchange Commission, 100 F Street NE, 
Washington, DC 20549-1090.

All submissions should refer to PCAOB-2023-01. This file number should 
be included on the subject line if email is used. To help the 
Commission process and review your comments more efficiently, please 
use only one method. The Commission will post all comments on the 
Commission's internet website (https://www.sec.gov/rules/pcaob.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rules that are filed with the 
Commission, and all written communications relating to the proposed 
rules between the Commission and any person, other than those that may 
be withheld from the public in accordance with the provisions of 5 
U.S.C. 552, will be available for website viewing and printing in the 
Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549-1090, on official business days between the hours of 10:00 a.m. 
and 3:00 p.m. Copies of such filing will also be available for 
inspection and copying at the principal office of the PCAOB. All 
comments received will be posted without charge; we do not edit 
personal identifying information from submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to PCAOB-2023-01 and should be submitted on or 
before April 25, 2023.

    For the Commission by the Office of the Chief Accountant.\13\
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    \13\ 17 CFR 200.30-11(b)(1) and (3).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-06961 Filed 4-3-23; 8:45 am]
BILLING CODE 8011-01-P
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