For the last few years, the SEC has been focused on the special risks that publicly traded China-based companies may pose to investors. This focus has resulted in the SEC providing guidance on what types of disclosures it will look for from China-based companies. For example, the SEC published CF Disclosure Guidance: Topic No. 10, Disclosure Considerations for China-Based Issuers on Nov. 23, 2020 (https://www.sec.gov/corpfin/disclosure-considerations-china-based-issuers) and the Sample Letter to China-Based Companies on Dec. 20, 2021 (https://www.sec.gov/corpfin/sample-letter-china-based-companies). 

On July 17, 2023, the SEC published an additional sample letter (link below) adding five additional sample comments to consider when drafting disclosures for China-based issuers.

The new sample letter includes sample SEC comments relating to:

• Commission Identified Issuers and the Holding Foreign Companies Accountable Act;
• PRC government intervention or control over the business affairs of the company; and 
• the Uyghur Forced Labor Prevention Act.

Companies with operations in China should review the new sample letter to determine whether they should be adding additional disclosures to their flings.