II 

118TH CONGRESS 

1ST SESSION S. 3203 

To amend the Investment Company Act of 1940 to impose certain 

requirements relating to the use of market indexes, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

NOVEMBER 2, 2023 

Mr. RUBIO introduced the following bill; which was read twice and referred 

to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To amend the Investment Company Act of 1940 to impose 

certain requirements relating to the use of market indexes, 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 ‘‘Index Provider Trans5 parency and Accountability Act’’. 

6 SEC. 2. MARKET INDEXES. 

7 (a) IN GENERAL.—The Investment Company Act of 

8 1940 (15 U.S.C. 80a–1 et seq.) is amended— 

9 (1) in section 8(b) (15 U.S.C. 80a–8(b))— 


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1 (A) in paragraph (4), by striking ‘‘and’’ at 

2 the end; 

3 (B) in paragraph (5), by striking the pe4 riod at the end and inserting ‘‘; and’’; and 

5 (C) by adding at the end the following: 

6 ‘‘(6) a disclosure of— 

7 ‘‘(A) whether the registrant intends to 

8 track the returns of, or benchmark against, a 

9 specific index of securities; and 

10 ‘‘(B) if the registrant intends to track the 

11 returns of, or benchmark against, a specific 

12 index of securities— 

13 ‘‘(i) the identity of the index provider; 

14 ‘‘(ii) any involvement of the registrant 

15 in designing the index; 

16 ‘‘(iii) any ability of the registrant to 

17 influence the construction or composition 

18 of the index; and 

19 ‘‘(iv) any licensing fees paid by the 

20 registrant to the index provider.’’; 

21 (2) in section 13 (15 U.S.C. 80a–13)— 

22 (A) by redesignating subsection (c) as sub23 section (d); and 

24 (B) by inserting after subsection (b) the 

25 following: 


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1 ‘‘(c) CHANGE IN INVESTMENT POLICY RELATING TO

2 INDEXING.— 

3 ‘‘(1) IN GENERAL.—With respect to a reg4 istered investment company that tracks the returns 

5 of, or benchmarks against, a specific index of securi6 ties, if a deviation with respect to that index occurs 

7 such that the deviation would be permitted under 

8 subsection (a)(3) if made directly by the investment 

9 company only if authorized by the vote of a majority 

10 of the outstanding voting securities of the invest11 ment company, the investment company may not 

12 continue to so track, or benchmark against, the 

13 index, unless so authorized by such a vote or by a 

14 vote by the board of directors of the investment com15 pany. 

16 ‘‘(2) RULE OF CONSTRUCTION.—For the pur17 poses of paragraph (1), a deviation with respect to 

18 an index that requires a vote, as described in that 

19 paragraph, includes such a deviation that adds new, 

20 or increases the weighting of, securities— 

21 ‘‘(A) of issuers that are headquartered or 

22 incorporated in the People’s Republic of China; 

23 or 

24 ‘‘(B) that are listed on exchanges in the 

25 People’s Republic of China.’’; and 


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1 (3) in section 30 (15 U.S.C. 80a–29)— 

2 (A) in subsection (b)(1), by striking ‘‘this 

3 title; and’’ and inserting the following: ‘‘this 

4 title, which shall include— 

5 ‘‘(A) information regarding whether the 

6 registered investment company tracks the re7 turns of, or benchmarks against (or intends to 

8 track, or benchmark against), a specific index 

9 of securities; and 

10 ‘‘(B) if the registered investment company 

11 engages in, or intends to engage in, the action 

12 described in subparagraph (A), the information 

13 described in section 8(b)(6)(B) with respect to 

14 the index described in subparagraph (A) of this 

15 paragraph; and’’; and 

16 (B) by adding at the end the following: 

17 ‘‘(k) ANNUAL DISCLOSURE REGARDING CHINESE

18 SECURITIES.— 

19 ‘‘(1) IN GENERAL.—Each registered investment 

20 company shall annually transmit to the stockholders 

21 of the investment company a report containing infor22 mation regarding, with respect to any security 

23 owned by the investment company that is issued by 

24 an issuer that is headquartered or incorporated in 


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1 the People’s Republic of China or listed on an ex2 change in the People’s Republic of China— 

3 ‘‘(A) the percentage of the securities of 

4 that issuer that are owned by governmental en5 tities in the People’s Republic of China; 

6 ‘‘(B) whether the entities described in sub7 paragraph (A) have a controlling financial in8 terest with respect to the issuer; 

9 ‘‘(C) the name of any official of the Chi10 nese Communist Party who is a member of the 

11 board of directors of— 

12 ‘‘(i) the issuer; or 

13 ‘‘(ii) the operating entity with respect 

14 to the issuer; 

15 ‘‘(D) whether the articles of incorporation 

16 of the issuer (or equivalent organizing docu17 ment) contains any charter of the Chinese Com18 munist Party, including the text of any such 

19 charter; and 

20 ‘‘(E) whether the investment company was 

21 unable to obtain any of the information re22 quired under any of subparagraphs (A) through 

23 (D). 

24 ‘‘(2) INCLUSION PERMITTED.—A report that a 

25 registered investment company is required to transVerDate Sep 11 2014 23:44 Nov 03, 2023 Jkt 049200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S3203.IS S3203

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1 mit under paragraph (1) may be included in a report 

2 that the investment company is required to transmit 

3 under subsection (e).’’. 

4 (b) TECHNICAL AND CONFORMING AMENDMENT.— 

5 Section 401(a) of the Comprehensive Iran Sanctions, Ac6 countability, and Divestment Act of 2010 (22 U.S.C. 

7 8551(a)) is amended, in the matter preceding paragraph 

8 (1), by striking ‘‘section 13(c)(1)(B)’’ and inserting ‘‘sec9 tion 13(d)(1)(B)’’. 

10 (c) UPDATES TO RULES.—Not later than 1 year after 

11 the date of enactment of this Act, the Securities and Ex12 change Commission shall make any updates to the rules 

13 of the Commission that are necessary as a result of this 

14 section and the amendments made by this section. 

Æ 


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