I 

118TH CONGRESS 

2D SESSION H. R. 7757 

To amend the Securities Exchange Act of 1934 to require disclosures with 

respect to certain financial risks relating to the People’s Republic of 

China, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 20, 2024 

Mr. SHERMAN (for himself and Mrs. SPARTZ) introduced the following bill; 

which was referred to the Committee on Financial Services 

A BILL 

To amend the Securities Exchange Act of 1934 to require 

disclosures with respect to certain financial risks relating 

to the People’s Republic of China, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘China Risk Reporting 

5 Act’’. 


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1 SEC. 2. DISCLOSURE WITH RESPECT TO CERTAIN FINAN2 CIAL RISKS RELATING TO THE PEOPLE’S RE3 PUBLIC OF CHINA. 

4 (a) SENSE OF CONGRESS.—It is the sense of Con5 gress that investing in China poses unique risks that in6 vestors should carefully consider. 

7 (b) ANNUAL DISCLOSURES.—Section 13 of the Secu8 rities Exchange Act of 1934 (15 U.S.C. 78m) is amended 

9 by adding at the end the following: 

10 ‘‘(t) DISCLOSURE WITH RESPECT TO CERTAIN FI11 NANCIAL RISKS RELATING TO THE PEOPLE’S REPUBLIC

12 OF CHINA.— 

13 ‘‘(1) IN GENERAL.—Each issuer required to file 

14 an annual report under subsection (a) shall include 

15 in such report— 

16 ‘‘(A) with respect to each covered foreign 

17 market, a description (including quantification, 

18 if possible) of— 

19 ‘‘(i) the degree to which each supply 

20 chain of such issuer relies upon or is ex21 posed to the covered foreign market; and 

22 ‘‘(ii) the operations of such issuer in 

23 the covered foreign market; 

24 ‘‘(B) a narrative description of the issuer’s 

25 China risk; and 


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1 ‘‘(C) if the issuer identifies a material 

2 China risk, a narrative description with respect 

3 to each China risk identified by the issuer of— 

4 ‘‘(i) the actions the issuer has taken 

5 or will take to minimize that China risk; 

6 and 

7 ‘‘(ii) the additional actions the issuer 

8 may take to minimize that China risk if a 

9 covered event occurs. 

10 ‘‘(2) RULE OF CONSTRUCTION.—Nothing in 

11 this subsection shall be construed to require an 

12 issuer to— 

13 ‘‘(A) disclose the assessment of such issuer 

14 as to the likelihood that a covered event or any 

15 China risk will occur; or 

16 ‘‘(B) provide any third-party assessment of 

17 such likelihood. 

18 ‘‘(3) DEFINITIONS.—In this subsection: 

19 ‘‘(A) CHINA RISK.—The term ‘China risk’ 

20 means an issuer’s exposure to material financial 

21 consequences caused by the Chinese Communist 

22 Party, the Government of the People’s Republic 

23 of China, or firms or other entities operating in 

24 the People’s Republic of China stemming from 


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1 reasonably likely, imminent, or ongoing factors, 

2 including— 

3 ‘‘(i) consequences for the operations 

4 of the issuer— 

5 ‘‘(I) in a covered foreign market; 

6 and 

7 ‘‘(II) caused by disruptions to 

8 supply chains, including supply chains 

9 for— 

10 ‘‘(aa) goods or services origi11 nating in a covered foreign mar12 ket; and 

13 ‘‘(bb) goods transported 

14 through or over the East China 

15 Sea or South China Sea; 

16 ‘‘(ii) devaluation, seizure, expropria17 tion, denial of access, or nationalization of 

18 assets, including intellectual property, of 

19 the issuer in a covered foreign market; 

20 ‘‘(iii) imperfect rule of law, unequal or 

21 imperfect enforcement of intellectual prop22 erty rights, or biased judicial proceedings; 

23 ‘‘(iv) with respect to any equity in24 vestments the issuer has within a covered 

25 foreign market, impediments to exercising 


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1 full voting rights of American or non-Chi2 nese shareholders or any firm in which the 

3 issuer has an equity investment taking ac4 tions against the interests of the firm’s 

5 shareholders in favor of the interests of the 

6 Chinese Communist Party or the Govern7 ment of the People’s Republic of China; 

8 and 

9 ‘‘(v) other material financial impact 

10 on the operations of the issuer caused by 

11 the Chinese Communist Party, the Govern12 ment of the People’s Republic of China, or 

13 firms or other entities operating in the 

14 People’s Republic of China. 

15 ‘‘(B) COVERED EVENT.—The term ‘cov16 ered event’— 

17 ‘‘(i) means a significant disruption to 

18 the economic relations between the United 

19 States and the People’s Republic of China, 

20 including— 

21 ‘‘(I) a partial or full trade embar22 go of the People’s Republic of China 

23 by the United States (or vice versa); 

24 ‘‘(II) trade or financial sanctions 

25 imposed on the People’s Republic of 


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1 China by the United States (or vice 

2 versa); and 

3 ‘‘(III) the United States revoking 

4 permanent normal trade relations 

5 with the People’s Republic of China 

6 (or vice versa); and 

7 ‘‘(ii) includes disruptions resulting 

8 from PRC military action against Taiwan. 

9 ‘‘(C) COVERED FOREIGN MARKET.—The 

10 term ‘covered foreign market’ means mainland 

11 China, the Hong Kong special administrative 

12 region, the Macau special administrative region, 

13 Taiwan, Japan, Mongolia, the Democratic Peo14 ple’s Republic of Korea, and the Republic of 

15 Korea. 

16 ‘‘(D) MAINLAND CHINA.—The term ‘main17 land China’ means the People’s Republic of 

18 China, excluding the Hong Kong special admin19 istrative region and the Macau special adminis20 trative region. 

21 ‘‘(E) OPERATIONS.—The term ‘operations’ 

22 may include, with respect to an issuer required 

23 to file an annual report under subsection (a), 

24 the assets, personnel, sales and revenue, liabilVerDate Sep 11 2014 20:22 Apr 04, 2024 Jkt 049200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H7757.IH H7757

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1 ities, technology, intellectual property, and 

2 other notable ties or activities of such issuer. 

3 ‘‘(F) PRC MILITARY ACTION AGAINST TAI4 WAN.—The term ‘PRC military action against 

5 Taiwan’— 

6 ‘‘(i) means a campaign of armed ag7 gression by the People’s Republic of China 

8 against the Government of Taiwan (or the 

9 territories under its control); and 

10 ‘‘(ii) includes— 

11 ‘‘(I) a firepower strike campaign; 

12 ‘‘(II) an island landing campaign; 

13 and 

14 ‘‘(III) a full or partial blockade 

15 (by sea or air).’’. 

16 (c) DISCLOSURE AT TIME OF REGISTRATION.—Sec17 tion 12(b) of the Securities Exchange Act of 1934 (15 

18 U.S.C. 78l(b)) is amended by adding at the end the fol19 lowing: 

20 ‘‘(4) The information described under section 

21 13(t)(1).’’. 

22 (d) EFFECTIVE DATE.—The amendments made by 

23 this section shall take effect on the date that is 180 days 

24 after the date of the enactment of this section. 

Æ 


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