,,ii #aafth ,,congress #b;d ,session ,s4 #dhgb ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,october #bf 7legislative day1 ,october #ai71 #bjbj,mr4 ,rubio introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to prohibit the trading of the securities of certain ,communist ,chinese military companies on a national securities exchange1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,american ,financial ,markets ,integrity and ,security ,act4 #b4 ,prohibitions relating to certain ,communist ,chinese military companies 7a7 ,definitions ,in this section3 7#a7 ,commission ,the term ,commission means the ,securities and ,exchange ,commission4 7#b7 ,control ,the term control has the meaning given the term in section #b7;a7 of the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#b7;a774 7#c7 ,covered entity 7,a7 ,in general ,the term covered entity-- 7i7 means an entity on-- 7,i7 the list of ,communist ,chinese military companies required by section #abcg7;b7 of the ,strom ,thurmond ,national ,defense ,authorization ,act for ,fiscal ,year #aiii 7,public ,law #aje-bfa2 #ej ,u4,s4,c4 #agja note72 or 7,,ii7 the entity list maintained by the ,bureau of ,industry and ,security of the ,department of ,commerce and set forth in ,supplement ,no4 #d to part #gdd of the title #ae1 ,code of ,federal ,regulations2 and 7ii7 includes a parent1 subsidiary1 or affiliate of1 or an entity controlled by1 an entity described in clause 7i74 7,b7 ,grace period ,for the purposes of this ,act1 and the amendments made by this ,act1 an entity shall be considered to be a covered entity beginning on the date that is #a year after the date on which the entity first qualifies under the applicable provision of subparagraph 7,a74 7#d7 ,exchange2 security ,the terms exchange and security have the meanings given those terms in section #c7;a7 of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;c7a774 7#e7 ,insurance company ,the term insurance company has the meaning given the term in section #b7;a7 of the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#b7;a774 7b7 ,prohibitions 7#a7 ,listing on exchange ,beginning on the date that is #a year after the date of enactment of this ,act1 the ,commission shall prohibit a covered entity from offering to sell or selling securities issued by the covered entity1 including pursuant to an exemption to section #e of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;e74 7#b7 ,investments2 limitation on actions 7,a7 ,in general ,the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#a et seq47 is amended-- 7i7 in section #ab7;d7 7#ae ,u4,s4,c4 #hj;a-#ab7;d771 by adding at the end the following3 7#f7 7,a7 ,it shall be unlawful for any investment company1 or any person that would be an investment company but for the application of paragraph 7#a7 or 7#g7 of section #c7;c71 to invest in a covered entity4 7,b7 ,in this paragraph1 the term covered entity has the meaning given the term in section #b7;a7 of the ,american ,financial ,markets ,integrity and ,security ,act4 2 and 7ii7 in section #ac7;c77#a7-- 7,i7 in subparagraph 7,a71 by striking or at the end2 7,,ii7 in subparagraph 7,b71 by striking the period at the end and inserting or2 and 7,,iii7 by adding at the end the following3 7,c7 are covered entities1 as that term is defined in section #ab7;d77#f77;,b74 4 7,b7 ,effective date ,the amendments made by subparagraph 7,a7 shall take effect on the date that is #a year after the date of enactment of this ,act4 7#c7 ,federal funds 7,a7 ,in general ,except as provided in subparagraph 7,b71 on and after the date that is #ahj days after the date of enactment of this ,act1 no ,federal funds may be used to enter into1 extend1 or renew a contract or purchasing agreement with a covered entity4 7,b7 ,waiver ,the head of a ,federal agency may issue a national security waiver to the prohibition in subparagraph 7,a7 for a period of not more than #b years with respect to a covered entity if the agency head submits to ,congress a notification that includes-- 7i7 a written justification for the waiver2 and 7ii7 a plan for a phase-out of the goods or services provided by the covered entity4 7#d7 ,investments by insurance companies 7,a7 ,in general ,on and after the date of enactment of this ,act1 an insurance company shall not invest in a covered entity4 7,b7 ,certification of compliance 7i7 ,in general ,each insurance company shall1 on an annual basis1 submit to the ,secretary of the ,treasury a certification of compliance with subparagraph 7,a74 7ii7 ,responsibilities of the ,secretary ,the ,secretary of the ,treasury shall create a form for the submission required under clause 7i7 in such a manner that minimizes the reporting burden on an insurance company making the submission4 7,c7 ,sharing information ,the ,secretary of the ,treasury1 acting through the ,federal ,insurance ,office1 shall share the information received under subparagraph 7,b7 and coordinate verification of compliance with ,state insurance offices4 7c7 ,qualified trusts1 etc 7#a7 ,in general ,subsection 7a7 of section #dja of the ,internal ,revenue ,code of #aihf is amended by inserting after paragraph 7#ch7 the following new paragraph3 7#ci7 ,prohibited investments ,a trust which is part of a plan shall not be treated as a qualified trust under this subsection unless the plan provides that no part of the plan's assets will be invested in any covered entity 7as defined in section #ab7;d77#f77;,b7 of the ,investment ,company ,act of #aidj74 4 7#b7 ,i,r,as ,paragraph 7#c7 of section #djh7;a7 of such ,code is amended by striking contracts and inserting contracts or in any covered entity 7as defined in section #ab7;d77#f77;,b7 of the ,investment ,company ,act of #aidj4 7#c7 ,fiduciary duty ,section #djd of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aajd7 is amended by adding at the end the following new subsection3 7f7 ,prohibited investments ,no fiduciary shall cause any assets of a plan to be invested in any covered entity 7as defined in section #ab7;d77#f77;,b7 of the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#ab7;d77#f77;,b7774 4 7#d7 ,effective date 7,a7 ,in general ,except as provided in subparagraph 7,b71 the amendments made by this subsection shall apply to plan years beginning after the date which is #ahj days after the date of the enactment of this ,act4 7,b7 ,plan amendments ,if subparagraph 7,c7 applies to any retirement plan or contract amendment-- 7i7 such plan or contract shall not fail to be treated as being operated in accordance with the terms of the plan during the period described in subparagraph 7,c77ii7 solely because the plan operates in accordance with the amendments made by this subsection1 and 7ii7 except as provided by the ,secretary of the ,treasury 7or the ,secretary's delegate71 such plan or contract shall not fail to meet the requirements of the ,internal ,revenue ,code of #aihf or the ,employee ,retirement ,income ,security ,act of #aigd by reason of such amendment4 7,c7 ,amendments to which paragraph applies 7i7 ,in general ,this subparagraph shall apply to any amendment to any plan or annuity contract which-- 7,i7 is made pursuant to the provisions of this section1 and 7,,ii7 is made on or before the last day of the first plan year beginning on or after the date which is #b years after the date of the enactment of this ,act 7#d years after such date of enactment1 in the case of a governmental plan74 7ii7 ,conditions ,this subparagraph shall not apply to any amendment unless-- 7,i7 during the period beginning on the date which is #ahj days after the date of the enactment of this ,act1 and ending on the date described in subclause 7,i77bb7 7or1 if earlier1 the date the plan or contract amendment is adopted71 the plan or contract is operated as if such plan or contract amendment were in effect1 and 7,,ii7 such plan or contract amendment applies retroactively for such period4 7,d7 ,subsequent amendments ,rules similar to the rules of subparagraphs 7,b7 and 7,c7 shall apply in the case of any amendment to any plan or annuity contract made pursuant to any update of the list of ,communist ,chinese military companies required by section #abcg7;b7 of the ,strom ,thurmond ,national ,defense ,authorization ,act for ,fiscal ,year #aiii 7,public ,law #aje-bfa2 #ej ,u4,s4,c4 #agja note7 which is made after the effective date of the amendments made by this subsection4 #c4 ,modification of requirements for list of ,communist ,chinese military companies ,section #abcg7;b7 of the ,strom ,thurmond ,national ,defense ,authorization ,act for ,fiscal ,year #aiii 7,public ,law #aje-bfa2 #ej ,u4,s4,c4 #agja note7 is amended-- 7#a7 by striking paragraph 7#b7 and inserting the following3 7#b7 ,revisions to the list 7,a7 ,additions ,the ,secretary of ,defense1 the ,secretary of ,commerce1 or the ,director of ,national ,intelligence may add a person to the list required by paragraph 7#a7 at any time4 7,b7 ,removals ,a person may be removed from the list required by paragraph 7#a7 if the ,secretary of ,defense1 the ,secretary of ,commerce1 and the ,director of ,national ,intelligence agree to remove the person from the list4 7,c7 ,submission of updates to ,congress ,not later than ,february #a of each year1 the ,secretary of ,defense shall submit a version of the list required in paragraph 7#a71 updated to include any additions or removals under this paragraph1 to the committees and officers specified in paragraph 7#a74 2 7#b7 by striking paragraph 7#c7 and inserting the following3 7#c7 ,consultation ,in carrying out paragraphs 7#a7 and 7#b71 the ,secretary of ,defense1 the ,secretary of ,commerce1 and the ,director of ,national ,intelligence shall consult with each other1 the ,attorney ,general1 and the ,director of the ,federal ,bureau of ,investigation4 2 and 7#c7 in paragraph 7#d71 by striking making the determination required by paragraph 7#a7 and of carrying out paragraph 7#b7 and inserting this section4 #d4 ,analysis of financial ambitions of the government of the people's republic of china 7a7 ,analysis required ,the ,director of the ,office of ,commercial and ,economic ,analysis of the ,air ,force shall conduct an analysis of-- 7#a7 the strategic importance to the ,government of the ,people's ,republic of ,china of inflows of ,united ,states dollars through capital markets to the ,people's ,republic of ,china2 7#b7 the methods by which that ,government seeks to manage such inflows2 7#c7 how the inclusion of the securities of ,chinese entities in stock or bond indexes affects such inflows and serves the financial ambitions of that ,government2 and 7#d7 how the listing of the securities of ,chinese entities on exchanges in the ,united ,states assists in-- 7,a7 meeting the strategic goals of that ,government1 including defense1 surveillance1 and intelligence goals2 and 7,b7 the fusion of the civilian and military components of that ,government4 7b7 ,submission to congress ,the ,director of the ,office of ,commercial and ,economic ,analysis of the ,air ,force shall submit to ,congress a report-- 7#a7 setting forth the results of the analysis conducted under subsection 7a72 and 7#b7 based on that analysis1 making recommendations for best practices to mitigate any national security and economic risks to the ,united ,states relating to the financial ambitions of the ,government of the ,people's ,republic of ,china4