S.1357 - Secure America’s Financial Exchanges Act; SAFE Act (119th Congress)
Summary
S.1357, the Secure America's Financial Exchanges Act (SAFE Act), aims to amend the Securities Exchange Act of 1934. It focuses on requiring issuers of securities, particularly Chinese entities, to disclose information regarding financial support from the People's Republic of China. This includes subsidies, loans, and any conditions attached to that support, such as export requirements or the use of specific intellectual property. The bill also mandates disclosure of Chinese Communist Party committees within the issuer and any connections between officers/directors and the Chinese government or party.
Expected Effects
The primary effect of the SAFE Act would be increased transparency regarding the financial ties between Chinese entities and the Chinese government. This could lead to greater investor awareness and potentially influence investment decisions. The SEC would be required to amend its rules to implement these disclosure requirements within 180 days of the Act's enactment.
Potential Benefits
- Increased transparency for investors regarding Chinese government influence on listed companies.
- Potential for more informed investment decisions based on disclosed information.
- May deter certain practices by Chinese entities related to government influence.
- Could enhance the integrity of U.S. financial markets by reducing information asymmetry.
- Promotes accountability by requiring disclosure of CCP committees and affiliations.
Most Benefited Areas:
Potential Disadvantages
- Potential for increased compliance costs for companies listed on U.S. exchanges.
- Risk of retaliatory measures from the Chinese government affecting U.S. companies operating in China.
- Possible chilling effect on foreign investment from Chinese companies.
- Difficulty in verifying the accuracy and completeness of disclosed information.
- May create additional regulatory burden for the SEC.
Constitutional Alignment
The bill appears to align with the Commerce Clause (Article I, Section 8, Clause 3) of the U.S. Constitution, which grants Congress the power to regulate commerce with foreign nations. By regulating the securities of Chinese entities listed on U.S. exchanges, the bill aims to protect U.S. investors and maintain the integrity of financial markets. The First Amendment implications are neutral as the bill compels disclosure rather than restricting speech.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).