S. 2046

119th CONGRESS 1st Session

To prohibit index funds from investing in Chinese companies, and for other purposes.

IN THE SENATE OF THE UNITED STATES · June 12, 2025 · Sponsor: Mr. Ricketts · Committee: Committee on Banking, Housing, and Urban Affairs

Table of contents

• S. 2046
  • SEC. 1. Short title
  • SEC. 2. Definitions
  • SEC. 3. Prohibition

SEC. 1. Short title

• This Act may be cited as the No China in Index Funds Act.

SEC. 2. Definitions

• In this Act:
  • The term amount of the transaction means—
  • The term Chinese company means a company—
  • The term hedge fund means an issuer that would be an investment company but for paragraph (1) or (7) of section 3(c) of the Investment Company Act of 1940 (). 15 U.S.C. 80a–3(c)
  • 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.
  • The term investment company has the meaning given the term in section 3 of the Investment Company Act of 1940 (). 15 U.S.C. 80a–3

SEC. 3. Prohibition

• (a) In general
  • An index fund may not invest in a Chinese company.
• (b) Divestment period safe harbor
  • With respect to an index fund with an investment in a Chinese 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
  • Any person who violates this section shall be subject to a civil penalty in an amount not to exceed the greater of—
    • $250,000; or
    • 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.
• (d) Rulemaking
  • The Securities and Exchange Commission may issue such rules as may be necessary to carry out this section.