Under the law, such companies will be banned from trading and delisted from exchanges if the PCAOB is not able to audit specified reports for three consecutive years.

This was in response to the lack of compliance and transparency among Chinese companies listed on US exchanges, thereby increasing the risk of defrauding investors.

[3] The consideration of the Holding Foreign Companies Accountable Act in Congress coincided with the high-profile financial scandal involving Chinese coffee chain Luckin Coffee, which fired both its CEO and COO in May 2020 for accounting fraud concerning the intentional fabrication of around $310 million in sales in 2019.

[7] On December 2, 2020, the bill passed the United States House of Representatives by unanimous voice vote.

[9] As required by the bill, the SEC started publishing in March 2022 a provisional list of foreign issuers that the PCAOB is unable to audit.