No Chinese Communist SURPRISE Parties Act
Bill: S.3598 | Sponsor: Sen. Rubio, Marco (R-FL)
Policy area: Finance and Financial Sector

Summary:
No Chinese Communist Subterfuge via Unregistered Regime Presence Rendered Invisible to Shareholders and Equivalent Parties Act or the No Chinese Communist SURPRISE Parties Act
This bill requires issuers of securities to annually disclose whether the issuer has established or maintained an organization of the Chinese Communist Party, if an organization of the Chinese Communist Party has participated in the operations of the issuer, and whether the issuer's board of directors (1) owes a fiduciary duty to the issuer and shareholders, and (2) is subject to heightened scrutiny with respect to conflicted controller transactions.

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.

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

SECTION 1. 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''.

SEC. 2. REPORTING REQUIREMENT.

    (a) Definitions.--In this section--
            (1) the term ``Commission'' means the Securities and 
        Exchange Commission;
            (2) 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));
            (3) 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));
            (4) the term ``joint venture partner'', with respect to a 
        covered issuer, means--
                    (A) a joint venture in which the covered issuer, or 
                a subsidiary with respect to the covered issuer, is a 
                party; or
                    (B) any other person that is a party in a joint 
                venture described in subparagraph (A); and
            (5) the term ``subsidiary'', with respect to a covered 
        issuer, means a wholly or partially owned subsidiary of the 
        covered issuer.
    (b) 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--
            (1) 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;
            (2) 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
            (3) 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--
                    (A) owes a fiduciary duty to the covered issuer and 
                shareholders of the covered issuer; and
                    (B) is subject to heightened scrutiny with respect 
                to conflicted controller transactions.
    (c) 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.
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