TICKER Act
Bill: S.4757 | Sponsor: Sen. Scott, Rick (R-FL)
Policy area: Finance and Financial Sector

Summary:
Trading and Investing with Clear Knowledge and Expectations about Risk Act or the TICKER Act
This bill requires the identification of consolidated variable interest entities on securities exchanges. Specifically, the symbol used on the exchange must identify these entities as consolidated variable interest entities. (A consolidated variable interest entity is a business structure where an investor holds a controlling interest in an entity through contractual agreements rather than having a majority of voting rights.)
In addition, the Securities and Exchange Commission must require brokers and dealers to warn investors in these entities that those investors may lack legal recourse with respect to these investments.

To amend the Securities Exchange Act of 1934 to require national 
securities exchanges to identify issuers that are consolidated variable 
               interest entities, 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 ``Trading and Investing with Clear 
Knowledge and Expectations about Risk Act'' or the ``TICKER Act''.

SEC. 2. SENSE OF CONGRESS.

    It is the sense of Congress that--
            (1) variable interest entities based in foreign 
        jurisdictions, including the People's Republic of China, pose a 
        specific and significant risk to investors in the United 
        States, including because investors that purchase shares of 
        those entities--
                    (A) have no equity or direct ownership interest; 
                and
                    (B) lack legal recourse; and
            (2) investors in the United States should more clearly be 
        made aware of the risk described in paragraph (1) in a 
        transparent, easily accessible, and standardized manner that is 
        recognizable to all persons that have invested, or seek to 
        invest, in entities that are described in that paragraph and 
        are listed on exchanges in the United States, such as through 
        clearly visible warning indicators on ticker symbols and other 
        company symbols used by those exchanges.

SEC. 3. IDENTIFICATION OF RISK WITH RESPECT TO CERTAIN ENTITIES.

    (a) Definitions.--In this section--
            (1) the terms ``broker'', ``dealer'', ``exchange'', and 
        ``security'' have the meanings given those terms in section 
        3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a));
            (2) the term ``Commission'' means the Securities and 
        Exchange Commission;
            (3) the term ``covered entity'' means a consolidated 
        variable interest entity;
            (4) the term ``national securities exchange'' means an 
        exchange that is registered as a national securities exchange 
        pursuant to section 6 of the Securities Exchange Act of 1934 
        (15 U.S.C. 78f), as amended by subsection (b) of this section; 
        and
            (5) the term ``variable interest entity'' has the meaning 
        given the term under generally accepted accounting principles.
    (b) Requirements.--
            (1) National securities exchanges.--
                    (A) In general.--Section 6(b) of the Securities 
                Exchange Act of 1934 (15 U.S.C. 78f(b)) is amended by 
                adding at the end the following:
            ``(11)(A) In this paragraph, the term `covered entity' has 
        the meaning given the term in section 3(a) of the Trading and 
        Investing with Clear Knowledge and Expectations about Risk Act.
            ``(B) The rules of the exchange require the identification 
        of each covered entity, the securities of which are listed on 
        the exchange, as a covered entity in the symbol for the covered 
        entity used on the exchange.''.
                    (B) Effective date; applicability.--The amendment 
                made by subparagraph (A) shall--
                            (i) take effect on the date that is 180 
                        days after the date of enactment of this Act; 
                        and
                            (ii) apply with respect to a covered 
                        entity, the securities of which are listed on a 
                        national securities exchange on or after the 
                        date described in clause (i).
            (2) Brokers and dealers.--Beginning not later than 180 days 
        after the date of enactment of this Act, the Commission shall 
        require brokers and dealers to provide warnings to investors 
        investing in covered entities that those investors may lack 
        legal recourse with respect to such an investment.
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