No China in Index Funds Act

The No China in Index Funds Act would bar index funds from investing in Chinese companies. It defines what counts as a Chinese company and sets rules for funds that currently hold such investments, including a 180-day safe harbor to divest. The bill imposes civil penalties for violations and authorizes the Securities and Exchange Commission (SEC) to issue rules to implement the Act. In short, it would significantly restrict or phase out exposure of U.S. index funds to Chinese firms, shifting capital away from Chinese equities held via passive funds and imposing regulatory compliance requirements on fund managers.