Sponsors (2)
The bill trades reduced exposure to PRC-linked firms and improved market integrity for reduced competition, higher costs and operational risks for U.S. financial firms and potential geopolitical retaliation, with a five-year sunset to allow reassessment.
Investors and taxpayers face reduced exposure to firms with direct PRC ties, lowering risks of espionage and other national-security-related threats to U.S. financial systems.
U.S. financial markets' integrity is strengthened by limiting the use of PRC-based platforms and network services, which may reduce vulnerabilities to manipulation or opaque practices.
The restriction expires after five years, giving Congress and regulators flexibility to reassess and adjust the policy as risks evolve.
Investors and clients face reduced competition and choice because brokers, dealers, and advisers with PRC ties could be barred from U.S. registration.
Broker-dealers, advisers, and related firms will likely incur higher compliance, restructuring, or vendor-replacement costs to meet the 15% ownership/control threshold or replace PRC-based service providers.
Operational risks: disruption or loss of software, customer support, network infrastructure, or other services provided by PRC-based vendors could interrupt brokerage and advisory operations and raise costs for clients.
Based on analysis of 2 sections of legislative text.
Bars registration of broker-dealers and investment advisers with specified PRC organization, control, or affiliate ties; defines control as >15% voting ownership; expires after five years.
Bars broker-dealers and investment advisers from registering with U.S. securities laws if they are organized in the People’s Republic of China (PRC), are controlled by PRC-organized entities or PRC nationals residing in the PRC, or have specified affiliates in the PRC that provide platform infrastructure, network services, software/product development, or customer support. "Control" is defined as beneficial ownership of more than 15% of voting securities. The prohibitions automatically expire five years after enactment.
Official title: To amend the securities laws to prohibit brokers, dealers, and investment advisers with certain connections to the People's Republic of China from registering with the Securities and Exchange Commission, and for other purposes.
Introduced May 26, 2026 by Michael Lawler · Last progress May 26, 2026