Section 1 Short title
This Act may be cited as the “PRC Broker-Dealers and Investment Advisers Moratorium Act”.
PRC Broker-Dealers and Investment Advisers Moratorium Act
A BILL
To amend the securities laws to prohibit brokers, dealers, and investment advisers with certain connections to the People’s Republic of China from registering with the Securities and Exchange Commission, and for other purposes.
Sec. 2 Prohibitions
Broker or dealer registration—
In general— Section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o) is amended by adding at the end the following:
“(p) Prohibition on registration as a broker or dealer related to Chinese ownership
“(1) Control defined—In this subsection, the term “control” means beneficially owning, either directly or through 1 or more companies, more than 15 percent of the voting securities of an entity.
“(2) Prohibition—A broker or dealer shall be prohibited from being registered as a broker or dealer under subsection (b) if—
“(A) the broker or dealer is an entity organized under the laws of the People’s Republic of China;
“(B) the broker or dealer is controlled by an entity organized under the laws of the People’s Republic of China;
“(C) the broker or dealer is controlled by a national of the People’s Republic of China who resides in the People’s Republic of China; or
“(D) there is an associated person of the broker or dealer organized under the laws of the People’s Republic of China that provides the broker or dealer with services, related to—
“(i) platform infrastructure;
“(ii) network services; or
“(iii) software or product development, maintenance, or support.”
Termination— On the date that is 5 years after the date of enactment of this Act, section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o) is amended by striking subsection (p), as added by paragraph (1) of this subsection.
Investment adviser registration—
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 as an investment adviser related to Chinese ownership
“(1) Control defined—In this subsection, the term “control” means beneficially owning, either directly or through 1 or more companies, more than 15 percent of the voting securities of an entity.
“(2) Prohibition—A person may not be registered as an investment adviser if—
“(A) the person is an entity organized under the laws of the People’s Republic of China;
“(B) the person is controlled by an entity organized under the laws of the People’s Republic of China;
“(C) the person is controlled by a national of the People’s Republic of China who resides in the People’s Republic of China; or
“(D) an affiliate of the person is organized under the laws of the People’s Republic of China that provides the person with services, including—
“(i) software development or support;
“(ii) product development; or
“(iii) customer service.”
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.