Bill > S1356

This bill aims to address risks associated with variable interest entities (VIEs), particularly those based in foreign jurisdictions like China, by requiring national securities exchanges to clearly identify these entities to investors. The bill recognizes that investors in VIEs often lack direct ownership rights and legal recourse, which can pose significant investment risks. Specifically, the bill mandates that national securities exchanges modify their listing rules to include a visible identifier in the trading symbol for any covered entity (defined as a consolidated VIE), making it immediately clear to investors that they are dealing with a potentially risky investment structure. Additionally, the Securities and Exchange Commission (SEC) will be required to mandate that brokers and dealers provide explicit warnings to investors about the potential lack of legal recourse when investing in these entities. The bill gives exchanges 180 days after enactment to implement these changes, with the goal of increasing transparency and helping investors make more informed decisions about international investment opportunities, especially in markets with complex corporate structures like China.

Housing and Urban Affairs

https://www.congress.gov/bill/119th-congress/senate-bill/1356/all-info