PRC Broker-Dealers and Investment Advisers Moratorium Act

This bill would block certain Wall Street firms with strong ties to China from key U.S. approvals. Broker-dealers could not be members of a national securities association if they are controlled by a Chinese company or by a Chinese national living in China, or if a China-based affiliate provides them “essential services” like software or customer support. Investment advisers with the same kinds of ties could not register with the SEC. “Control” generally means owning more than 25% of voting shares. Regulators could examine records and facilities abroad to check compliance. These restrictions would automatically end five years after the law takes effect .

This aims to limit Chinese influence over U.S. trading and investing platforms, potentially affecting which firms Americans can use for brokerage or advice. Most everyday investors would see little change unless their firm is covered by these rules, in which case the firm may need to change ownership, end certain service relationships, or exit the market .

• Who is affected:
  • Broker-dealers and investment advisers with Chinese control or key China-based service affiliates
• What changes:
  • Bar on broker-dealer association membership and on SEC registration for advisers; expanded exam powers to review foreign books and facilities
• When:
  • Rules apply upon enactment and expire after five years unless renewed by new law