Tag: emerging market risk disclosure

In new statement, SEC and PCAOB officials highlight emerging market risk disclosure

In this new Statement, a number of SEC and PCAOB officials—SEC Chair Jay Clayton, PCAOB Chair William D. Duhnke III, SEC Chief Accountant Sagar Teotia, Corp Fin Director William Hinman and Investment Management Director Dalia Blass—discuss the risks and exposures of companies based, or with significant operations, in emerging markets, for both U.S. issuers and foreign private issuers. Although the SEC is committed to high-quality disclosure standards, its ability to enforce these standards in emerging markets is limited and is “significantly dependent on the actions of local authorities” and the constraints of “national policy considerations.” As a result, in many emerging markets, “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.”  The Statement is summarized below. The message is that, notwithstanding similarity in form and appearance between disclosures from U.S. domestic companies and disclosures from or related to emerging markets, disclosures from emerging markets may well differ in scope and quality and companies need to provide appropriate risk disclosure in that regard.