S 1357119th CongressIn Committee

SAFE Act

Introduced: Apr 8, 2025

Standard Summary

Comprehensive overview in 1-2 paragraphs

The SAFE Act (Secure America’s Financial Exchanges Act) would require U.S. stock exchanges to impose new disclosure rules on issuers that list on those exchanges. Specifically, before an issuer’s initial listing and in every annual report filed with the SEC (and the exchange) under Section 13(a), the issuer would have to disclose whether the Government of the People’s Republic of China (PRC) has provided any financial support. If such support exists, the issuer must detail the conditions attached to that support (for example, export requirements, buying from certain entities, using particular IP, or employing CCP members). The bill also requires disclosure about any Chinese Communist Party (CCP) committees within the issuer—who participates and what roles they play—and about any officers or directors who hold or have previously held positions with the CCP or the PRC government, including their titles and locations. The SEC would be required to amend its rules within 180 days to implement these provisions. In short, the bill aims to increase transparency about Chinese government involvement in companies seeking to list on U.S. markets, with a focus on governance structures and personnel tied to China’s government or the CCP.

Key Points

1Adds an ongoing disclosure obligation for listed issuers to reveal any Chinese government financial support, including direct subsidies, loans, grants, loan guarantees, tax concessions, or other benefits.
2Requires disclosure of the conditions tied to any such Chinese support, including whether the government demanded exports targets, purchases from specific entities, use of certain IP, or employment of CCP members.
3Requires disclosure of CCP committees within the issuer, specifying which employees are on the committee and the roles those employees play.
4Requires disclosure of any current or former officers or directors who hold or held positions with the CCP or the PRC government, including their titles and geographic locations.
5Mandates a 180-day timeline for the SEC to amend its rules to implement these changes, and for exchanges to enforce them as part of initial listings and annual 13(a) reporting.

Impact Areas

Primary group/area affected: Chinese-linked issuers seeking to list on U.S. exchanges, and existing U.S.-listed companies with ties to the PRC; investors in those securities.Secondary group/area affected: U.S. Securities and Exchange Commission, stock exchanges (e.g., NYSE, NASDAQ), corporate governance professionals, and auditors who prepare and verify annual reports.Additional impacts: Increased regulatory compliance costs and reporting burden for affected issuers; potential shifts in capital access for Chinese entities seeking U.S. listings; heightened transparency around governance and potential political risk considerations for investors; possible privacy or competitive concerns related to disclosing personnel with CCP or government ties.The bill would apply to the “rules of the exchange” and the SEC’s rulemaking, tying eligibility and annual reporting to new China-related disclosures.It uses terms that may require careful interpretation in practice (e.g., what counts as “financial support” from the PRC government and what qualifies as a CCP committee or a “position” held by an officer/director).At introduction, sponsors include Sen. Scott (FL) and several co-sponsors; status is “introduced,” with referral to the Banking, Housing, and Urban Affairs Committee. The bill has not become law at this stage.

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