What This Bill Does
This bill changes rules for stock exchanges to require Chinese companies that sell stock in the United States to disclose information about their ties to the Chinese government and the Chinese Communist Party. The bill amends the Securities Exchange Act of 1934 to add these disclosure requirements.
Who It Affects
- Chinese companies that want to list securities (stocks or bonds) on U.S. stock exchanges
- U.S. stock exchanges
- The Securities and Exchange Commission (the federal agency that oversees stock markets)
Key Provisions
- Chinese companies must disclose before listing their stock and in yearly reports whether the Chinese government has given them any financial support, including subsidies, grants, loans, tax breaks or help with government contracts (Sec. 2(a))
- If the Chinese government provided support, companies must disclose what conditions came with that support, such as export requirements, forced purchases from certain suppliers, intellectual property restrictions or requirements to employ Chinese Communist Party members (Sec. 2(a))
- Companies must disclose whether the Chinese Communist Party has any committees inside the company and which employees are on those committees (Sec. 2(a))
- Companies must disclose information about any current or former officers or directors who hold or held positions with the Chinese Communist Party or Chinese government, including their job titles and locations (Sec. 2(a))
- The Securities and Exchange Commission must update its rules within 180 days to make these disclosure requirements official (Sec. 2(b))
What Changes
Stock exchanges will require Chinese companies seeking to sell stock in the United States to provide detailed information about their financial and political ties to the Chinese government and the Chinese Communist Party. This information will appear in company documents before they list on exchanges and in yearly reports.
Important Definitions
None defined in bill text.
II
118TH CONGRESS
1ST SESSION
S. 854
To amend the Securities Exchange Act of 1934 to address the issuance
of securities by Chinese entities, and for other purposes.
IN THE SENATE OF THE UNITED STATES
MARCH 16, 2023
Mr. SCOTT of Florida (for himself, Mr. BRAUN, Mr. VANCE, and Mr. LEE)
introduced the following bill; which was read twice and referred to the
Committee on Banking, Housing, and Urban Affairs
A BILL
To amend the Securities Exchange Act of 1934 to address
the issuance of securities by Chinese entities, and for
other purposes.
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
2
SECTION 1. SHORT TITLE.
3
This Act may be cited as the ‘‘Secure America’s Fi-
4
nancial Exchanges Act’’ or the ‘‘SAFE Act’’.
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SEC. 2. SECURITIES.
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(a) IN GENERAL.—Section 6(b) of the Securities Ex-
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change Act of 1934 (15 U.S.C. 78f(b)) is amended by add-
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ing at the end the following:
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‘‘(11) The rules of the exchange require an
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issuer, before the initial listing of any security of the
2
issuer on the exchange, and in each annual report
3
filed with the Commission and the exchange under
4
section 13(a), to disclose the following information:
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‘‘(A) Whether the Government of the Peo-
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ple’s Republic of China has provided the issuer
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with any financial support, including—
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‘‘(i) any direct subsidy, grant, loan,
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loan guarantee, tax concession, or benefit
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with respect to procurement policy; or
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‘‘(ii) any other form of support.
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‘‘(B) If the Government of the People’s
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Republic of China has provided support de-
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scribed in subparagraph (A), the conditions
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under which that Government provided that
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support, including whether that Government re-
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quired the issuer to—
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‘‘(i) satisfy certain requirements with
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respect to exports;
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‘‘(ii) purchase items from certain enti-
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ties;
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‘‘(iii) use certain intellectual property;
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or
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‘‘(iv) employ members of the Chinese
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Communist Party or other employees of
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that Government.
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‘‘(C) Whether there are any committees of
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the Chinese Communist Party established with-
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in the issuer, which shall include the disclosure
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of—
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‘‘(i) which employees of the issuer
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comprise that committee; and
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‘‘(ii) the roles played by the employees
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described in clause (i).
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‘‘(D) Information regarding each indi-
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vidual who, as of the date on which the disclo-
13
sure is made, is an officer or director of the
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issuer (or a subsidiary of the issuer) and holds,
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or previously held, a position with the Chinese
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Communist Party or the Government of the
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People’s Republic of China, including the title
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of that position and the geographic location in
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which the individual holds or held that position,
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as applicable.’’.
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(b) RULES.—Not later than 180 days after the date
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of enactment of this Act, the Securities and Exchange
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Commission shall make any amendments to the rules of
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the Commission that are necessary as a result of the
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amendments made by subsection (a).
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Æ
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