I 
118TH CONGRESS 
2D SESSION 
H. R. 7758 
To prohibit index funds from investing in Chinese companies, 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 prohibit index funds from investing in Chinese companies, 
and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘No China in Index 
Funds Act’’. 
SEC. 2. PROHIBITION. 
(a) IN GENERAL.—An index fund may not invest in 
a Chinese company. 
(b) DIVESTMENT PERIOD SAFE HARBOR.—With re-
spect to an index fund with an investment in a Chinese 
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company on the date of enactment of this Act, subsection 
(a) shall not apply to such investment during the 180- 
day period beginning on the date of enactment of this Act. 
(c) CIVIL PENALTY.— 
(1) IN GENERAL.—Any person who violates this 
section shall be subject to a civil penalty in an 
amount not to exceed the greater of— 
(A) $250,000; or 
(B) an amount that is twice the amount of 
the transaction that is the basis of the violation 
with respect to which the penalty is imposed. 
(2) AMOUNT OF A TRANSACTION DEFINED.— 
For purposes of paragraph (1)(B), the term 
‘‘amount of a transaction’’ means— 
(A) with respect to a purchase that violates 
this section, the purchase price; and 
(B) with respect to the holding of an in-
vestment that violates this section, the fair mar-
ket value of the investment at the time of the 
violation. 
(d) RULEMAKING.—The Securities and Exchange 
Commission may issue such rules as may be necessary to 
carry out this section. 
(e) DEFINITIONS.—In this section: 
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(1) CHINESE
COMPANY.—The term ‘‘Chinese 
company’’ means a company— 
(A) incorporated or otherwise organized in 
China; 
(B) that has a majority of its assets or em-
ployees located in China; 
(C) owned by, controlled by, or subject to 
the jurisdiction or direction of the government 
of the People’s Republic of China; 
(D) where a majority of the company’s 
value depends on the revenues, profits, market 
capitalization, assets, or the value of a security 
(including options to purchase or sell) of a com-
pany described under subparagraph (A), (B), or 
(C), as determined by the Securities and Ex-
change Commission; or 
(E) where a company described under sub-
paragraph (A), (B), or (C) has control, as de-
fined under section 230.405 of title 17, Code of 
Federal Regulations, of the company, as deter-
mined by the Securities and Exchange Commis-
sion. 
(2) HEDGE
FUND.—The term ‘‘hedge fund’’ 
means an issuer that would be an investment com-
pany but for paragraph (1) or (7) of section 3(c) of 
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the Investment Company Act of 1940 (15 U.S.C. 
80a–3(c)). 
(3) INDEX
FUND.—The term ‘‘index fund’’ 
means an investment company or hedge fund that is 
designed to track an index of securities or a portion 
of such an index. 
(4) INVESTMENT COMPANY.—The term ‘‘invest-
ment company’’ has the meaning given that term 
under section 3 of the Investment Company Act of 
1940 (15 U.S.C. 80a–3). 
Æ 
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