I 
118TH CONGRESS 
2D SESSION 
H. R. 9162 
To amend the securities laws to require certain disclosures and reports with 
respect to the exposure of issuers to China and the threat of sudden 
loss of market access between the United States and China, and for 
other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 25, 2024 
Mr. LUETKEMEYER (for himself, Mr. MOOLENAAR, and Mr. NEWHOUSE) in-
troduced the following bill; which was referred to the Committee on Fi-
nancial Services 
A BILL 
To amend the securities laws to require certain disclosures 
and reports with respect to the exposure of issuers to 
China and the threat of sudden loss of market access 
between the United States and China, 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 ‘‘PRC Risk Trans-
parency Act’’. 
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SEC. 2. CHINA EXPOSURE DISCLOSURES. 
(a) COVERED ISSUER DISCLOSURES.—Section 13 of 
the Securities Exchange Act of 1934 (15 U.S.C. 78m) is 
amended by adding at the end the following: 
‘‘(t) CHINA EXPOSURE DISCLOSURES.— 
‘‘(1) IN
GENERAL.—Each covered issuer re-
quired to file an annual report under subsection (a) 
shall disclose in that report the following informa-
tion, to the extent the information would be material 
to investors, with respect to the period 1 year prior 
to the disclosure under this subsection: 
‘‘(A) CHINA EXPOSURE.— 
‘‘(i) The percentage of the total rev-
enue and profits of the issuer that are de-
rived from each of— 
‘‘(I) the People’s Republic of 
China (‘China’); 
‘‘(II) Hong Kong; and 
‘‘(III) the Xinjiang Uyghur Au-
tonomous Region. 
‘‘(ii) The percentage and the total 
value of the capital investment of the 
issuer that is located in each of— 
‘‘(I) China; 
‘‘(II) Hong Kong; and 
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‘‘(III) the Xinjiang Uyghur Au-
tonomous Region. 
‘‘(iii) The percentage and the total 
value of the supply chain of the issuer that 
is sourced from each of— 
‘‘(I) China; 
‘‘(II) Hong Kong; and 
‘‘(III) the Xinjiang Uyghur Au-
tonomous Region. 
‘‘(iv) Details on any joint venture with 
a covered entity, including— 
‘‘(I) the covered entity in the 
joint venture; 
‘‘(II) the percentage of total rev-
enue and of total profits of the issuer 
that are derived from the joint ven-
ture; and 
‘‘(III) the percentage and the 
total value of the capital investment 
associated with the joint venture. 
‘‘(B) THREAT OF SUDDEN LOSS OF MAR-
KET ACCESS.— 
‘‘(i) The anticipated impact of the sce-
nario described in paragraph (2) on the 
business operations, supply chain, revenues 
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and profits, and future earnings of the 
issuer, to the extent it would be material 
to investors. 
‘‘(ii) Whether the issuer has a plan in 
place to deal with the scenario described in 
paragraph (2). 
‘‘(iii) The outlines of the plan de-
scribed in clause (ii) and any actions the 
issuer is taking to prepare for the scenario 
described in paragraph (2). 
‘‘(C) RELATIONSHIPS WITH CERTAIN ENTI-
TIES.—A list of business relationships with any 
of the following entities, their affiliates, and 
their subsidiaries: 
‘‘(i) Any entity on the Non-SDN Chi-
nese Military-Industrial Complex Compa-
nies List (NS-CMIC List) maintained by 
the Office of Foreign Assets Control of the 
Department of the Treasury under Execu-
tive Order 14032 (86 Fed. Reg. 30145; re-
lating to addressing the threat from securi-
ties investments that finance certain com-
panies of the People’s Republic of China), 
or any successor order. 
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‘‘(ii) Any Chinese military company 
identified by the Secretary of Defense pur-
suant to section 1260H of the William M. 
(Mac) Thornberry National Defense Au-
thorization Act for Fiscal Year 2021 (Pub-
lic Law 116–283; 10 U.S.C. 113 note). 
‘‘(iii) Any entity included on any of 
the following lists maintained by the De-
partment of Commerce in the following lo-
cations of the Export Administration Reg-
ulations set forth in subchapter C of chap-
ter VII of title 15, Code of Federal Regu-
lations: 
‘‘(I) The Entity List set forth in 
Supplement No. 4 to part 744 of the 
Export Administration Regulations or 
any successor regulations. 
‘‘(II) The Denied Persons List as 
described in section 764.3(a)(2) of the 
Export Administration Regulations or 
any successor regulations. 
‘‘(III) The Military End User 
List set forth in Supplement No. 7 to 
part 744 of the Export Administra-
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tion Regulations or any successor reg-
ulations. 
‘‘(iv) Any entity on which sanctions 
have been imposed by the Office of Foreign 
Assets Control of the Department of the 
Treasury in connection with human rights 
abuses. 
‘‘(v) Any entity that produces equip-
ment that is prohibited under the Report 
and Order, Order, and Further Notice of 
Proposed Rulemaking of the Federal Com-
munications Commission in the matter of 
Protecting 
Against 
National 
Security 
Threats to the Communications Supply 
Chain through the Equipment Authoriza-
tion Program (ET No. 21–232) and Pro-
tecting Against National Security Threats 
to the Communications Supply Chain 
through the Competitive Bidding Program 
(EA Docket No. 21–233; FCC 22–84; 
adopted November 11, 2022). 
‘‘(vi) An entity on the Uyghur Forced 
Labor Prevention Act Entity List of the 
Forced Labor Enforcement Task Force. 
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‘‘(D) TIES TO THE GOVERNMENT OF THE 
PEOPLE’S REPUBLIC OF CHINA.—A list of the 
following: 
‘‘(i) Employees with a management 
role in the issuer that are members of the 
Chinese Communist Party, including each 
employee’s role within the issuer. 
‘‘(ii) Any business relationships with 
an agency or instrumentality of the govern-
ment of the People’s Republic of China, in-
cluding the provision of goods, services, or 
technology to the People’s Liberation 
Army, the Ministry of State Security, or 
other security or intelligence services in the 
People’s Republic of China. 
‘‘(iii) Any investment received from 
the government of the People’s Republic of 
China or an agency or instrumentality 
thereof. 
‘‘(iv) Any requests from any Chinese 
Communist Party official or agency or in-
strumentality of the government of the 
People’s Republic of China (including re-
quests made under the People’s Republic 
of China Intelligence Law of 2017 or the 
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Counter-Espionage Law) that conflict with 
the issuer’s obligations under this Act, the 
Securities Act of 1933, or the Sarbanes- 
Oxley Act of 2002. 
‘‘(2) SCENARIO.— 
‘‘(A) IN
GENERAL.—The scenario de-
scribed in this paragraph is a scenario where, 
owing to an act of Chinese military aggres-
sion— 
‘‘(i) the President imposes sanctions 
on China, Chinese entities, and those who 
transact with China or Chinese entities of 
a similar type and magnitude as the sanc-
tions imposed on the Russian Federation, 
Russian entities, and those who transact 
with the Russian Federation or Russian 
entities in response to the Russian Federa-
tion’s February 2022 invasion of Ukraine; 
‘‘(ii) the Secretary of Commerce im-
plements export controls with respect to 
China of a similar type as the Secretary 
implemented with respect to the Russian 
Federation following the Russian Federa-
tion’s February 2022 invasion of Ukraine; 
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‘‘(iii) trade between the United States 
and China declines by 80 percent and com-
pletely ceases in goods with military end- 
use or dual-use applications; 
‘‘(iv) the Chinese government imposes 
similar sanctions, export controls, and 
trade restrictions on the United States and 
United States companies as the Russian 
Federation government did following the 
Russian Federation’s February 2022 inva-
sion of Ukraine; and 
‘‘(v) the Chinese government seizes all 
China-based assets of American companies 
that could be re-purposed for military pro-
duction. 
‘‘(B) REVISIONS.—On January 1, 2028, 
and every 3 years thereafter, the Financial Sta-
bility Oversight Council may revise the scenario 
described under subparagraph (A) by pub-
lishing a new scenario that, after consultations 
with other executive branch officials, seems 
most likely to occur as a result of Chinese mili-
tary aggression. 
‘‘(3) BOARD OF DIRECTORS CERTIFICATION.— 
The board of directors of a covered issuer required 
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to make a disclosure under paragraph (1) shall cer-
tify that the board has reviewed and affirmed the 
disclosure. 
‘‘(4) RULEMAKING.— 
‘‘(A) IN
GENERAL.—Not later than the 
end of the 60-day period beginning on the date 
of enactment of this subsection, the Commis-
sion shall issue rules to carry out the amend-
ments made by this section. 
‘‘(B) PROPRIETARY
INFORMATION
AND 
TRADE SECRETS.—In issuing the rules required 
under subparagraph (A), the Commission shall, 
in consultation with the Attorney General and 
the National Security Council, ensure that 
issuers may make the disclosure of information 
required under such rules without disclosing 
proprietary information or trade secrets. 
‘‘(C) SAFE HARBOR.—In issuing the rules 
required under subparagraph (A), the Commis-
sion shall establish rules under which a covered 
issuer shall not be held liable for statements 
that were compiled with reasonable due dili-
gence and to the best of the covered issuer’s 
knowledge. 
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‘‘(5) DEFINITIONS.—In this subsection, the fol-
lowing definitions apply: 
‘‘(A) CHINA.—The term ‘China’ means the 
People’s Republic of China, including all Special 
Administrative Regions. 
‘‘(B) CONTROL.—The term ‘control’ has 
the meaning given in section 800.208 of title 
31, Code of Federal Regulations (as in effect on 
the date of enactment of this subsection). 
‘‘(C) COVERED ENTITY.—The term ‘cov-
ered entity’ means an entity— 
‘‘(i) that is incorporated in, has a 
principal place of business in, or is orga-
nized under the laws of the People’s Re-
public of China; 
‘‘(ii) the equity securities of which are 
primarily traded in the ordinary course of 
business on one or more exchanges in the 
People’s Republic of China; 
‘‘(iii) that is the Chinese Communist 
Party, or the state or the government of 
the People’s Republic of China, as well as 
any political subdivision, agency, or instru-
mentality thereof; or 
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‘‘(iv) that is subject to the direction or 
control of any entity described in clause 
(i), (ii), or (iii). 
‘‘(D) COVERED ISSUER.—The term ‘cov-
ered issuer’ means— 
‘‘(i) an issuer— 
‘‘(I) with respect to which— 
‘‘(aa) at least 5 percent of 
the revenue of the issuer is de-
rived from the Chinese market; 
‘‘(bb) at least 5 percent of 
the capital investment of the 
issuer, by value, is located in 
China; or 
‘‘(cc) at least 5 percent of 
the supply chain of the issuer, by 
value, is sourced from China; and 
‘‘(II) that has a market capital-
ization of $1,000,000,000 or more at 
any point in the previous 365 days; 
and 
‘‘(ii) an issuer with respect to which— 
‘‘(I) at least 25 percent of the 
revenue of the issuer is derived from 
the Chinese market; 
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‘‘(II) at least 25 percent of the 
capital investment of the issuer, by 
value, is located in China; or 
‘‘(III) at least 25 percent of the 
supply chain of the issuer, by value, is 
sourced from China.’’. 
(b) INVESTMENT ADVISER DISCLOSURES.—Section 
204 of the Investment Advisers Act of 1940 (15 U.S.C. 
80b–4) is amended by adding at the end the following: 
‘‘(g) REPORT ON THE LOSS OF MARKET ACCESS TO 
CHINA TO PRIVATE FUNDS ADVISED BY A COVERED IN-
VESTMENT ADVISER.— 
‘‘(1) IN GENERAL.—The Commission shall, by 
rule, require each covered investment adviser, for 
each private fund advised by the covered investment 
advisor, to disclose to the private fund and the Com-
mission, every quarter, a plain English report that 
outlines the anticipated effects, to the extent it 
would be material to investors, of a scenario of the 
type described in section 13(t)(2) of the Securities 
and Exchange Act of 1934 on the returns of such 
fund. 
‘‘(2) SAFE HARBOR.—A covered investment ad-
viser that makes a disclosure under paragraph (1), 
if such disclosure is made to the best of the knowl-
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edge of the covered investment adviser after reason-
able investigation and due diligence and consistent 
with the fiduciary duty of the covered investment ad-
viser, shall not be held liable for such disclosure. 
‘‘(3) BOARD OF DIRECTORS CERTIFICATION.— 
The board of directors of a covered investment ad-
viser required to make a disclosure under paragraph 
(1) shall certify that the board has reviewed and af-
firmed the disclosure. 
‘‘(4) COVERED
INVESTMENT
ADVISER
DE-
FINED.—In this subsection, the term ‘covered invest-
ment adviser’ means an investment adviser with as-
sets under management of $500,000,000 or more at 
any point in the previous 365 days. 
‘‘(h) REPORT ON EXPOSURE TO COVERED FOREIGN 
ENTITIES.— 
‘‘(1) IN GENERAL.—The Commission shall, by 
rule, require each covered investment adviser to dis-
close to the Commission, every quarter— 
‘‘(A) for each investment company advised 
by the covered investment advisor— 
‘‘(i) the total exposure of the invest-
ment company to covered foreign entities; 
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‘‘(ii) a list of each security issued by 
a covered foreign entity and held by the in-
vestment company; and 
‘‘(iii) the value of each holding; 
‘‘(B) the total exposure of all investment 
companies advised by the covered investment 
adviser to covered foreign entities; 
‘‘(C) a list of each security issued by a cov-
ered foreign entity and held by an investment 
company advised by the covered investment ad-
viser; and 
‘‘(D) the value of each holding identified 
under subparagraph (C). 
‘‘(2) DEFINITIONS.—In this subsection: 
‘‘(A) COVERED
FOREIGN
ENTITY.—The 
term ‘covered foreign entity’ means a covered 
entity, as defined under section 13(t)(5) of the 
Securities and Exchange Act of 1934. 
‘‘(B) COVERED
INVESTMENT
ADVISER.— 
The term ‘covered investment adviser’ has the 
meaning given the term under subsection 
(g)(4).’’. 
(c) INVESTMENT COMPANY DISCLOSURES.—Section 
30 of the Investment Company Act of 1940 (15 U.S.C. 
80a–29) is amended by adding at the end the following: 
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‘‘(l) REPORT ON EXPOSURE TO COVERED FOREIGN 
ENTITIES AND VARIABLE INTEREST ENTITIES.— 
‘‘(1) IN GENERAL.—The Commission shall, by 
rule, require each registered investment company to 
disclose to the Commission, every quarter— 
‘‘(A) the total exposure of the investment 
company to covered foreign entities, including; 
‘‘(i) a list of each security issued by a 
covered foreign entity and held by the in-
vestment company; and 
‘‘(ii) the value of each holding; and 
‘‘(B) the total exposure of the investment 
company to variable interest entities, includ-
ing— 
‘‘(i) a list of each security issued by a 
variable interest entity held by the invest-
ment company; and 
‘‘(ii) the value of each holding. 
‘‘(2) COVERED FOREIGN ENTITY DEFINED.—In 
this subsection, the term ‘covered foreign entity’ 
means a covered entity, as defined under section 
13(t)(5) of the Securities and Exchange Act of 
1934.’’. 
(d) VARIABLE INTEREST ENTITY EXPOSURE.—Sec-
tion 204(b)(3)(C) of the Investment Advisers Act of 1940 
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(15 U.S.C. 80b–4(b)(3)(C)) is amended by inserting be-
fore the semicolon the following: ‘‘, including total expo-
sure to variable interest entities, a list of each security 
issued by a variable interest entity held in the fund, and 
the value of those securities’’. 
(e) NO EXPANSION
OF LIABILITY.—No provision 
under the amendments made by this section requiring the 
disclosure of information shall give rise to a claim under 
the Securities Act of 1933 or the Securities Exchange Act 
of 1934 unless the disclosure is both— 
(1) false or misleading; and 
(2) material to an investment decision such that 
there is a substantial likelihood that a reasonable in-
vestor would consider the information important in 
assessing the risk-adjusted financial returns from 
the investment decision. 
Æ 
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