II
117th CONGRESS
2d Session
S. 3598
IN THE SENATE OF THE UNITED STATES
February 8 (legislative day, February 3), 2022
Mr. Rubio (for himself and Mrs. Blackburn) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs
A BILL
To require issuers filing annual reports with the Securities and Exchange Commission to disclose whether the issuers have connections with the Chinese Communist Party, and for other purposes.
Short title
This Act may be cited as the No Chinese Communist Subterfuge via Unregistered Regime Presence Rendered Invisible to Shareholders and Equivalent Parties Act
or the No Chinese Communist SURPRISE Parties Act
.
Reporting requirement
Definitions
In this section—
the term Commission means the Securities and Exchange Commission;
the term covered issuer means an issuer, including a foreign private issuer, that is required to file annual reports with the Commission under section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a));
the term issuer has the meaning given the term in section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a));
the term joint venture partner, with respect to a covered issuer, means—
a joint venture in which the covered issuer, or a subsidiary with respect to the covered issuer, is a party; or
any other person that is a party in a joint venture described in subparagraph (A); and
the term subsidiary, with respect to a covered issuer, means a wholly or partially owned subsidiary of the covered issuer.
Requirement
Each covered issuer, in each annual report that the covered issuer files with the Commission (beginning with the second annual report that the covered issuer files with the Commission after the date of enactment of this Act), shall—
disclose whether the covered issuer, or any subsidiary or joint venture partner with respect to the covered issuer, has established or maintained an organization of the Chinese Communist Party during the period covered by the report;
if an organization of the Chinese Communist Party has participated in the operations of the covered issuer, or of any subsidiary or joint venture partner with respect to the covered issuer, during the period covered by the report, summarize that participation; and
disclose whether the board of directors of the covered issuer (or the equivalent body with respect to the covered issuer), under the laws of the jurisdiction in which the covered issuer is incorporated or otherwise organized—
owes a fiduciary duty to the covered issuer and shareholders of the covered issuer; and
is subject to heightened scrutiny with respect to conflicted controller transactions.
Updates to rules
Not later than 1 year after the date of enactment of this Act, the Commission shall make any updates to the rules of the Commission that are necessary as a result of this section.
