119-s2046

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 2046 Introduced in Senate

    (IS) ]

<DOC>

119th CONGRESS
 1st Session
 S. 2046

 To prohibit index funds from investing in Chinese companies, and for 
 other purposes.

_______________________________________________________________________

 IN THE SENATE OF THE UNITED STATES

 June 12, 2025

 Mr. Ricketts introduced the following bill; which was read twice and 
 referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

 A BILL

 To prohibit index funds from investing in Chinese companies, and for 
 other purposes.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``No China in Index Funds Act''.

SEC. 2. DEFINITIONS.

 In this Act:

    (1) Amount of the transaction.--The term ``amount of the 
 transaction'' means--
        (A) with respect to a purchase that violates this 
 Act, the purchase price; and
        (B) with respect to the holding of an investment 
 that violates this Act, the fair market value of the 
 investment at the time of the violation.

    (2) Chinese company.--The term ``Chinese company'' means a 
 company--
        (A) incorporated or otherwise organized in the 
 People's Republic of China;
        (B) that has a majority of its assets or employees 
 located in the People's Republic of China;
            (C) owned by, controlled by, or subject to the 
 jurisdiction or direction of the government of the 
 People's Republic of China;
            (D) where a majority of the value of the company 
 depends on the revenues, profits, market 
 capitalization, assets, or the value of a security 
 (including options to purchase or sell) of a company 
 described in subparagraph
        (A) ,
        (B) , or
            (C) , as 
 determined by the Securities and Exchange Commission; 
 or
        (E) where a company described under subparagraph
        (A) ,
        (B) , or
            (C) has control, as defined in 

section 230.405 of title 17, Code of Federal Regulations, of 
 the company, as determined by the Securities and 
 Exchange Commission.

    (3) Hedge fund.--The term ``hedge fund'' means an issuer 
 that would be an investment company but for paragraph

    (1) or

    (7) of 

section 3
            (c) of the Investment Company Act of 1940 (15 
 U.S.C. 80a-3
            (c) ).

    (4) Index fund.--The term ``index fund'' means an 
 investment company or hedge fund that is designed to track an 
 index of securities or a portion of such an index.

    (5) Investment company.--The term ``investment company'' 
 has the meaning given the term in 

section 3 of the Investment 
 Company Act of 1940 (15 U.S.C. 80a-3).

SEC. 3. PROHIBITION.

    (a) In General.--An index fund may not invest in a Chinese company.

    (b) Divestment Period Safe Harbor.--With respect to an index fund 
with an investment in a Chinese company on the date of enactment of 
this Act, subsection

    (a) shall not apply to such investment during the 
180-day period beginning on the date of enactment of this Act.
            (c) Civil Penalty.--Any person who violates this section shall be 
subject to a civil penalty in an amount not to exceed the greater of--

    (1) $250,000; or

    (2) an amount that is twice the amount of the transaction 
 that is the basis of the violation with respect to which the 
 penalty is imposed.
            (d) Rulemaking.--The Securities and Exchange Commission may issue 
such rules as may be necessary to carry out this section.
 <all>