II 118th CONGRESS 1st Session S. 3286 IN THE SENATE OF THE UNITED STATES November 9, 2023 Mr. Casey (for himself and Mr. Scott of Florida ) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To require the Securities and Exchange Commission to amend the rules of the Commission relating to disclosures by advisers of private funds, and for other purposes.

1. Short title This Act may be cited as the Disclosing Investments in Foreign Adversaries Act of 2023 . 2. Definitions In this Act: (1) Commission The term Commission means the Securities and Exchange Commission. (2) Country of concern The term country of concern — (A) has the meaning given the term covered nation in section 4872(d) of title 10, United States Code; and (B) includes a jurisdiction that the Commission, in consultation with the Secretary of State and the Secretary of the Treasury, determines to be subject to the political and legal control of a covered nation, as defined in section 4872(d) of title 10, United States Code. (3) Covered entity The term covered entity means an entity or person that is required to file Form PF. (4) Exempt reporting adviser The term exempt reporting adviser means an investment adviser described in section 275.204–4(a) of title 17, Code of Federal Regulations, or any successor regulation. (5) Form ADV The term Form ADV means the form described in section 279.1 of title 17, Code of Federal Regulations, or any successor regulation. (6) Form PF The term Form PF means the form described in section 279.9 of title 17, Code of Federal Regulations, or any successor regulation. (7) Private fund The term private fund has the meaning given the term in section 202(a) of the Investment Advisers Act of 1940 ( 15 U.S.C. 80b–2(a) ). (8) Private fund assets The term private fund assets has the meaning given the term in section 275.204(b)–1 of title 17, Code of Federal Regulations, or any successor regulation. 3. Enhanced disclosure requirements for advisers of private funds (a) Requirements (1) In general Not later than 1 year after the date of enactment of this Act, the Commission shall amend Form PF and Form ADV, and the rules of the Commission governing the submission of Form PF and Form ADV, to, subject to paragraph (2), require each covered entity and each exempt reporting adviser to annually disclose when submitting Form PF or Form ADV, respectively, the total private fund assets in countries of concern attributable to the private funds advised by the covered entity or exempt reporting adviser, as applicable, which shall be broken down by the percentage of those assets in each country of concern. (2) Application For the purposes of paragraph (1), the Commission shall determine whether a private fund asset is in a country of concern based on— (A) the amount of capital that is invested in an entity (including a subsidiary of an entity)— (i) that has a physical presence or employees in that country of concern; or (ii) the plurality of the sales of which are from that country of concern; and (B) the proportion of the total assets and liabilities of an entity described in subparagraph (A) that are located in that country of concern. (b) Reporting by Commission (1) Publicly available reports (A) In general Not later than 1 year after the date on which the Commission makes the amendments required under subsection (a), and not less frequently than annually thereafter, the Commission shall prepare and make publicly available a report containing a list of covered entities and exempt reporting advisers that, for the period covered by the report, have disclosed more than 0 private fund assets under Form PF or Form ADV (as amended pursuant to that subsection) in at least 1 country of concern, which shall be aggregated by the covered entity or exempt reporting adviser making that disclosure. (B) Additional requirements Each report prepared and made available by the Commission under subparagraph (A) shall— (i) be aggregated by covered entity or exempt reporting adviser; and (ii) include the percentage of private fund assets disclosed by a covered entity or exempt reporting adviser, as applicable. (2) Rule of construction Nothing in this subsection may be construed to permit the Commission to make available any information that appears on Form PF or Form ADV other than the information that is included on Form PF or Form ADV as a result of the requirements under subsection (a). 4. Exempted transactions (a) In general The Securities Exchange Act of 1934 ( 15 U.S.C. 78a et seq. ) is amended by inserting after section 13A ( 15 U.S.C. 78m–1 ) the following: 13B. Disclosure requirements relating to certain exempted transactions (a) Definitions In this section: (1) Beneficial owner The term beneficial owner means a person that is determined to be a beneficial owner under section 240.13d–3 of title 17, Code of Federal Regulations, or any successor regulation. (2) Country of concern The term country of concern — (A) has the meaning given the term covered nation in section 4872(d) of title 10, United States Code; and (B) includes a jurisdiction that the Commission, in consultation with the Secretary of State and the Secretary of the Treasury, determines to be subject to the political and legal control of a covered nation, as defined in section 4872(d) of title 10, United States Code. (3) Covered exempted transaction The term covered exempted transaction means an offer or sale of a security that is— (A) exempt from registration under section 5 of the Securities Act of 1933 ( 15 U.S.C. 77e ); and (B) structured or intended to comply with— (i) section 230.506(b) of title 17, Code of Federal regulations, or any successor regulation; (ii) sections 230.901, 230.902, and 230.903 of title 17, Code of Federal Regulations, or any successor regulations; or (iii) section 230.144A of title 17, Code of Federal Regulations, or any successor regulation. (b) Requirement (1) In general Notwithstanding any other provision of law, in the case of an issuer that conducts a covered exempted transaction described in paragraph (2), that issuer shall provide to the Commission, at such time and in such manner as the Commission may prescribe, the following information: (A) The identity of the issuer. (B) The place of incorporation of the issuer. (C) Whether the issuer is associated with at least 1 consolidated entity, the plurality of the assets of which are in a country of concern. (D) Whether the issuer is associated with at least 1 consolidated entity that is incorporated in a country of concern. (E) The amount of securities sold pursuant to the covered exempted transaction and the net proceeds to the issuer. (F) The beneficial owners of the issuer. (G) The intended use of the proceeds from the covered exempted transaction, including each country in which the issuer intends to invest those proceeds, which shall be broken down by the percentage of net proceeds by industry within each such country. (H) The exemption the issuer relies on with respect to the covered exempted transaction. (2) Particular covered exempted transaction described A covered exempted transaction described in this paragraph is, with respect to the issuer offering or selling the security that is the subject of the covered exempted transaction, either of the following instances: (A) An offer or sale of securities in an amount that is not less than $25,000,000. (B) An offer or sale of a security such that the offer or sale, together with all covered exempted transactions by that issuer during the 1-year period preceding the date on which the issuer offers or sells the security, constitutes offers or sales in the aggregate of an amount that is not less than $50,000,000. (c) Authority To revise and promulgate rules, regulations, and forms The Commission shall, for the protection of investors and fair and orderly markets— (1) revise and issue such rules, regulations, and forms as may be necessary to carry out this section; and (2) issue rules to set conditions that limit the future use of covered exempted transactions for issuers that do not comply with the disclosure requirements of this section. (d) Applicability This section shall apply with respect to any covered exempted transaction that occurs on or after the date that is 1 year after the date of enactment of this section. (e) Reports The Commission shall, on a quarterly basis, prepare and make publicly available a report that includes all information submitted by an issuer under this section during the quarter covered by the report, if that issuer— (1) is— (A) incorporated in a country of concern; or (B) incorporated outside of a country of concern and is associated with at least 1 consolidated entity— (i) the plurality of the assets of which are in a country of concern; or (ii) that is incorporated in a country of concern; or (2) discloses in a filing made pursuant to this section that the issuer intends to invest the proceeds from a covered exempted transaction in a country of concern. .