Us Congress House Bill HB499

Us Congress 2023-2024 Regular Session

• Introduced: 1/25/23
• Refer: 1/25/23

Caption

Securing American Families and Enterprises from People's Republic of China Investments Act or the SAFE from PRC Investments Act This bill requires certain issuers of securities and funds traded on an exchange to report on connections to China or the Communist Party of China. In particular, an issuer with specified connections to China must annually disclose a variety of details, including whether executive-level employees, senior directors, or board members are members of the Communist Party of China; interactions with the party; expenditures in China; expenditures in the United States regarding operations and lobbying activities; and the ability of the Public Company Accounting Oversight Board to audit the issuer. Additionally, an exchange-traded fund that invests in a Chinese company must annually disclose about that company ownership information, party involvement, whether the company participates in specified Chinese policies or activities, any ties to U.S.-sanctioned individuals, and the types of products or services produced by the company.

Impact

The legislation mandates that covered issuers disclose a wide range of information, including whether executives or board members of these companies have ties to the Communist Party of China or have familial connections to Chinese officials. Furthermore, companies based in the PRC must report their financial operations, including profits held in the country, and the rules that govern capital repatriation. Such disclosures aim to protect American investors and businesses by ensuring they are fully informed about the potential risks associated with investments in Chinese companies.

Summary

House Bill 499, titled the 'Securing American Families and Enterprises from People's Republic of China Investments Act' or 'SAFE from PRC Investments Act', proposes amendments to the Securities Exchange Act of 1934. It aims to impose additional annual disclosures on public companies and exchange-traded funds that have connections to companies in the People's Republic of China (PRC) or the Communist Party of China. This initiative is intended to enhance transparency regarding the operations and affiliations of these entities, particularly in light of national security concerns surrounding investments related to China.

Contention

Opponents of HB499 express concerns that these increased regulatory requirements may hinder investment opportunities and complicate relationships between American and Chinese businesses. Proponents, however, argue that the bill is necessary for safeguarding American interests against espionage and undue influence from Chinese entities. They stress the importance of transparency in the financial operations of companies connected to regimes that may not align with American democratic values. The ongoing debate emphasizes a broader discussion about national security versus economic cooperation.