# Understanding the SAFE from PRC Investments Act

This bill requires American companies and investment funds to disclose detailed information about their connections to China. If you invest in stocks or mutual funds, own a business, or work for a publicly traded company, this could affect you by changing what information gets revealed about Chinese business ties.

The bill targets two main groups. First, it applies to any large company listed on American stock exchanges that either operates in China, is headquartered there, or is structured through shell companies to hide Chinese ownership. Second, it covers exchange-traded funds (ETFs)—those popular investment funds you can buy like regular stocks—that invest in Chinese companies. These companies and funds would have to file annual reports disclosing extensive information about their Chinese operations and relationships.

For companies, the required disclosures are sweeping. They'd have to reveal whether Chinese government officials or Communist Party members sit on their boards, whether top executives are party members or have family ties to Chinese officials, and whether the company has a Communist Party branch embedded in its corporate structure. Companies would also need to report how much cash they hold in China, any restrictions on moving money out of the country, and detailed information about investments, technology transfers, and debt involving Chinese operations. Additionally, they'd disclose spending on lobbying in America, interactions between executives and Chinese officials, customer data storage locations, and whether their accounting auditors can be inspected by American regulators.

For investment funds holding Chinese company stocks, the disclosures focus on the companies themselves. Funds would have to report whether Chinese companies they invest in are government-owned, have military contracts, are connected to forced labor, produce sensitive technology like semiconductors or facial recognition systems, or appear on various U.S. government watchlists. The goal is to give American investors a clear picture of what they're actually funding when they buy these investments, so they can make informed decisions about where their money goes.

SAFE from PRC Investments Act

Rep. Fallon, Pat [R-TX-4]

Securing American Families and Enterprises from People's Republic of China Investments Act or the SAFE from PRC Investments Act This bill requires certain issuers of securities and funds traded on an exchange to report on connections to China or the Communist Party of China. In particular, an issuer with specified connections to China must annually disclose a variety of details, including <ul> <li>whether executive-level employees, senior directors, or board members are members of the Communist Party of China; </li> <li>interactions with the party; </li> <li>expenditures in China; </li> <li>expenditures in the United States regarding operations and lobbying activities; and </li> <li>the ability of the Public Company Accounting Oversight Board to audit the issuer. </li> </ul> Additionally, an exchange-traded fund that invests in a Chinese company must annually disclose about that company <ul> <li>ownership information, </li> <li>party involvement, </li> <li>whether the company participates in specified Chinese policies or activities, </li> <li>any ties to U.S.-sanctioned individuals, and </li> <li>the types of products or services produced by the company.</li> </ul>