PRC Broker-Dealers and Investment Advisers Moratorium Act

The PRC Broker-Dealers and Investment Advisers Moratorium Act would temporarily bar certain US-based financial firms with connections to the People’s Republic of China from two key routes: (1) broker/dealer membership in national securities associations (for five years) and (2) registration as investment advisers with the Securities and Exchange Commission (SEC). The prohibitions are triggered if a firm is controlled by PRC-entity ownership, controlled by a PRC national residing in China, or has an affiliate in PRC that provides essential services (e.g., software development, product development, or customer service). The bill also grants broad examination authority to the relevant association and the SEC to enforce these provisions, including potential examinations of books and facilities located abroad. The 5-year sunset means these prohibitions would be repealed five years after enactment. In short, the bill aims to restrict Chinese-owned or -affiliated entities from certain US securities activities for a limited period, leveraging ownership/control tests and affiliate connections to determine eligibility, and enabling cross-border regulatory oversight during the moratorium.