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