PRC Broker-Dealers and Investment Advisers Moratorium Act

Key Points

• This bill would ban brokers, dealers, and investment advisers with ties to China from registering with the SEC. This includes firms organized under Chinese law, controlled by Chinese entities or nationals, or that rely on Chinese affiliates for key services.
• A company counts as "controlled" by China if a Chinese person or entity owns more than 15 percent of its voting shares, either directly or through other companies.
• The ban also covers firms that use China-based affiliates for technical work like software development, platform infrastructure, network services, product development, customer service, or maintenance and support.
• The restrictions would automatically expire five years after the bill becomes law, creating a temporary moratorium rather than a permanent ban. Congress could choose to renew it before it sunsets.
• The bill is bipartisan, introduced by Representatives Lawler and Gottheimer, and was referred to the House Financial Services Committee.