119-s2552

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 2552 Introduced in Senate

    (IS) ]

<DOC>

119th CONGRESS
 1st Session
 S. 2552

 To amend the securities laws to prohibit brokers and dealers with 
 certain connections to the People's Republic of China from being 
 members of a national securities association, to prohibit investment 
 advisers with certain connections to the People's Republic of China 
 from registering with the Securities and Exchange Commission, and for 
 other purposes.

_______________________________________________________________________

 IN THE SENATE OF THE UNITED STATES

 July 30, 2025

Mr. McCormick (for himself and Mr. Fetterman) 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 laws to prohibit brokers and dealers with 
 certain connections to the People's Republic of China from being 
 members of a national securities association, to prohibit investment 
 advisers with certain connections to the People's Republic of China 
 from registering with the Securities and Exchange Commission, 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 ``PRC Broker-Dealers and Investment 
Advisers Moratorium Act''.

SEC. 2. PROHIBITIONS.

    (a) Broker or Dealer Membership in a National Securities 
Association.--

    (1) In general.--

Section 15A of the Securities Exchange Act 
 of 1934 (15 U.S.C. 78o-3) is amended by adding at the end the 
 following:
 ``

    (o) Prohibition on Membership Related to Chinese Ownership.--
 ``

    (1) === Definitions. ===
-In this subsection:
 ``
        (A) Affiliate.--The term `affiliate' has the 
 meaning given the term in 

section 2 of the Bank Holding 
 Company Act of 1956 (12 U.S.C. 1841).
 ``
        (B) Control.--The term `control' means 
 beneficially owning, either directly or through 1 or 
 more companies, more than 25 percent of the voting 
 securities of an entity.
 ``
            (C) U.S. person.--The term `U.S. person' means--
 ``
            (i) a United States citizen or an alien 
 lawfully admitted for permanent residence to 
 the United States; or
 ``
            (ii) an entity organized under the laws 
 of the United States or any jurisdiction within 
 the United States, including a foreign branch 
 of such an entity.
 ``

    (2) Prohibition.--A broker or dealer shall be prohibited 
 from being a member of a national securities association if the 
 broker or dealer--
 ``
        (A) is controlled by an entity organized under 
 the laws of, or otherwise subject to the jurisdiction 
 of, the People's Republic of China;
 ``
        (B) is controlled by a national of the People's 
 Republic of China who resides in the People's Republic 
 of China; or
 ``
            (C) has an affiliate organized under the laws of, 
 or otherwise subject to the jurisdiction of, the 
 People's Republic of China that provides the broker or 
 dealer with essential services, including software 
 development or support, product development, or 
 customer service.
 ``

    (3) Examination authority.--A national securities 
 association shall have such examination authority over a member 
 that is a broker or dealer as the association determines to be 
 necessary to ensure compliance with this subsection, including 
 the right to examine the books and facilities of a broker or 
 dealer located in a foreign country.''.

    (2) Termination.--On the date that is 5 years after the 
 date of enactment of this Act, 

section 15A of the Securities 
 Exchange Act of 1934 (15 U.S.C. 78o-3) is amended by striking 
 subsection

    (o) , as added by paragraph

    (1) of this subsection.

    (b) Investment Adviser Registration.--

    (1) In general.--

Section 203 of the Investment Advisers Act 
 of 1940 (15 U.S.C. 80b-3) is amended by adding at the end the 
 following:
 ``

    (o) Prohibition on Registration Related to Chinese Ownership.--
 ``

    (1) === Definitions. ===
-In this subsection:
 ``
        (A) Affiliate.--The term `affiliate' has the 
 meaning given the term in 

section 2 of the Bank Holding 
 Company Act of 1956 (12 U.S.C. 1841).
 ``
        (B) Control.--The term `control' means 
 beneficially owning, either directly or through 1 or 
 more companies, more than 25 percent of the voting 
 securities of an entity.
 ``
            (C) U.S. person.--The term `U.S. person' means--
 ``
            (i) a United States citizen or an alien 
 lawfully admitted for permanent residence to 
 the United States; or
 ``
            (ii) an entity organized under the laws 
 of the United States or any jurisdiction within 
 the United States, including a foreign branch 
 of such an entity.
 ``

    (2) Prohibition.--A person shall be prohibited from being 
 registered as an investment adviser if the person--
 ``
        (A) is controlled by an entity organized under 
 the laws of, or otherwise subject to the jurisdiction 
 of, the People's Republic of China;
 ``
        (B) is controlled by a national of the People's 
 Republic of China who resides in the People's Republic 
 of China; or
 ``
            (C) has an affiliate organized under the laws of, 
 or otherwise subject to the jurisdiction of, the 
 People's Republic of China that provides the broker or 
 dealer with essential services, including software 
 development or support, product development, or 
 customer service.
 ``

    (3) Examination authority.--The Commission shall have 
 such examination authority over an investment adviser as the 
 Commission determines to be necessary to ensure compliance with 
 this subsection, including the right to examine the books and 
 facilities of an investment adviser in a foreign country.''.

    (2) Termination.--On the date that is 5 years after the 
 date of enactment of this Act, 

section 203 of the Investment 
 Advisers Act of 1940 (15 U.S.C. 80b-3) is amended by striking 
 subsection

    (o) , as added by paragraph

    (1) of this subsection.
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