What This Bill Does
This bill requires national securities exchanges to identify certain types of companies in their stock ticker symbols. The bill targets consolidated variable interest entities, which are a specific type of business structure. Congress believes these entities, especially those based in foreign countries, create risks for American investors.
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Who It Affects
- National securities exchanges (the platforms where stocks trade)
- Brokers and dealers (companies that buy and sell securities for customers)
- The Securities and Exchange Commission (the federal agency that oversees securities)
- American investors who buy stock in affected companies
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Key Provisions
- National securities exchanges must identify each covered entity (a consolidated variable interest entity) in the stock symbol used on the exchange. (Sec. 3(b)(1)(A))
- The Securities and Exchange Commission must require brokers and dealers to warn investors that they may lack legal recourse when investing in covered entities. (Sec. 3(b)(2))
- These requirements apply only to covered entities whose securities are listed on a national securities exchange after the
What Changes
If this becomes law, stock ticker symbols on exchanges will display a clear identifier marking certain companies as covered entities. Brokers and dealers will be required to give investors warnings that they may not have legal remedies if problems arise with these investments.
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Important Definitions
- Variable interest entity: A business structure defined under generally accepted accounting principles (standard financial reporting rules).
- Consolidated variable interest entity: A variable interest entity that is consolidated (combined for financial reporting purposes).
- Covered entity: A consolidated variable interest entity.
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Effective Date
180 days after the bill becomes law.
II
118TH CONGRESS
1ST SESSION
S. 855
To amend the Securities Exchange Act of 1934 to require national securities
exchanges to identify issuers that are consolidated variable interest enti-
ties, and for other purposes.
IN THE SENATE OF THE UNITED STATES
MARCH 16, 2023
Mr. SCOTT of Florida (for himself and Mr. VAN HOLLEN) introduced the fol-
lowing bill; which was read twice and referred to the Committee on Bank-
ing, Housing, and Urban Affairs
A BILL
To amend the Securities Exchange Act of 1934 to require
national securities exchanges to identify issuers that are
consolidated variable interest entities, and for other pur-
poses.
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 ‘‘Trading and Investing
4
with Clear Knowledge and Expectations about Risk Act’’
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or the ‘‘TICKER Act’’.
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SEC. 2. SENSE OF CONGRESS.
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It is the sense of Congress that—
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•S 855 IS
(1) variable interest entities based in foreign ju-
1
risdictions, including the People’s Republic of China,
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pose a specific and significant risk to investors in
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the United States, including because investors that
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purchase shares of those entities—
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(A) have no equity or direct ownership in-
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terest; and
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(B) lack legal recourse; and
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(2) investors in the United States should more
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clearly be made aware of the risk described in para-
10
graph (1) in a transparent, easily accessible, and
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standardized manner that is recognizable to all per-
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sons that have invested, or seek to invest, in entities
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that are described in that paragraph and are listed
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on exchanges in the United States, such as through
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clearly visible warning indicators on ticker symbols
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and other company symbols used by those ex-
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changes.
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SEC. 3. IDENTIFICATION OF RISK WITH RESPECT TO CER-
19
TAIN ENTITIES.
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(a) DEFINITIONS.—In this section—
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(1) the terms ‘‘broker’’, ‘‘dealer’’, ‘‘exchange’’,
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and ‘‘security’’ have the meanings given those terms
23
in section 3(a) of the Securities Exchange Act of
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1934 (15 U.S.C. 78c(a));
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•S 855 IS
(2) the term ‘‘Commission’’ means the Securi-
1
ties and Exchange Commission;
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(3) the term ‘‘covered entity’’ means a consoli-
3
dated variable interest entity;
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(4) the term ‘‘national securities exchange’’
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means an exchange that is registered as a national
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securities exchange pursuant to section 6 of the Se-
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curities Exchange Act of 1934 (15 U.S.C. 78f), as
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amended by subsection (b) of this section; and
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(5) the term ‘‘variable interest entity’’ has the
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meaning given the term under generally accepted ac-
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counting principles.
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(b) REQUIREMENTS.—
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(1) NATIONAL SECURITIES EXCHANGES.—
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(A) IN GENERAL.—Section 6(b) of the Se-
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curities Exchange Act of 1934 (15 U.S.C.
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78f(b)) is amended by adding at the end the
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following:
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‘‘(11)(A) In this paragraph, the term ‘covered
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entity’ has the meaning given the term in section
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3(a) of the Trading and Investing with Clear Knowl-
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edge and Expectations about Risk Act.
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‘‘(B) The rules of the exchange require the
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identification of each covered entity, the securities of
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which are listed on the exchange, as a covered entity
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•S 855 IS
in the symbol for the covered entity used on the ex-
1
change.’’.
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(B) EFFECTIVE
DATE; APPLICABILITY.—
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The amendment made by subparagraph (A)
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shall—
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(i) take effect on the date that is 180
6
days after the date of enactment of this
7
Act; and
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(ii) apply with respect to a covered en-
9
tity, the securities of which are listed on a
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national securities exchange on or after the
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date described in clause (i).
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(2) BROKERS
AND
DEALERS.—Beginning not
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later than 180 days after the date of enactment of
14
this Act, the Commission shall require brokers and
15
dealers to provide warnings to investors investing in
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covered entities that those investors may lack legal
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recourse with respect to such an investment.
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Æ
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