Fetterman and McCormick Introduce Legislation to Protect US Economic Security from PRC Financial Firms

Strategic Insights -

Senators John Fetterman (D-PA) and Dave McCormick (R-PA) have introduced S. 2552, the PRC Broker-Dealers and Investment Advisers Moratorium Act, aimed at protecting Pennsylvanians, US markets, and national economic security from Chinese Communist Party (CCP)-linked firms. The legislation responds to growing concerns over the unequal regulatory landscape between the US and the People's Republic of China, which exposes US financial markets and consumer data to risk. The bill seeks to halt CCP-linked broker-dealers and investment advisers until regulators can conduct a thorough inspection.

Key Takeaways:

  • The PRC Broker-Dealers and Investment Advisers Moratorium Act (S. 2552) targets CCP-linked financial firms, protecting US investors and economic security.
  • The legislation aims to address the unequal regulatory landscape between the US and China, which poses a risk to US financial markets and consumer data.
  • CCP-linked firms have access to millions of Americans' personally identifiable information and sensitive data through Chinese affiliates operating in the US.
  • US regulators lack the authority to conduct enforcement actions or examinations in mainland China, creating a monitoring gap.
  • The bill seeks to provide financial regulators with the necessary time to evaluate the impact on US consumer protection and safeguard US retail investors.
  • Senators Fetterman and McCormick have introduced this bipartisan bill, highlighting the need for swift action to protect the US financial system from CCP-linked entities.

Statistics:

  • The US markets are more fully open for business to Chinese affiliates than Chinese markets are to US firms, creating an unequal regulatory landscape.
  • CCP-linked firms have access to millions of Americans' personally identifiable information and sensitive data.
  • The US regulators, including the SEC and FINRA, do not have the authority to conduct enforcement actions or examinations in mainland China.
  • The PRC Broker-Dealers and Investment Advisers Moratorium Act aims to protect US investors and safeguard national economic security from CCP-linked firms.

Sources:

  • Fetterman, S. (2023). Fetterman-McCormick Introduce Legislation to Target PRC Financial Firms & Protect U.S Economic Security. [News Release].