The Secure America’s Financial Exchanges Act (SAFE Act) amends the Securities Exchange Act of 1934 to require issuers listing on U.S. exchanges to disclose any form of Chinese government financial support and the conditions attached to that support. It also requires disclosure of internal CCP committees, and any officers or directors who have held positions with the Chinese government or the CCP, including titles and locations.
The bill directs the SEC to amend its rules within 180 days to implement these disclosures. These provisions apply to initial listings and to annual reports filed under section 13(a).
At a Glance
What It Does
Adds an 11th item to Section 6(b) requiring issuers to disclose whether the PRC government provided financial support, the nature of that support, and any conditions attached. It also requires disclosure of CCP committees within the issuer and any officers/directors who have held CCP or PRC government positions, including titles and locations.
Who It Affects
Issuers listing on U.S. exchanges, and existing issuers with ties to the PRC; the SEC; U.S. exchanges; investors relying on governance disclosures; and issuer compliance functions responsible for compiling these disclosures.
Why It Matters
It increases visibility into foreign government influence over issuers, enabling better risk assessment for investors and regulators and signaling a shift toward stricter transparency around geopolitical ties in capital markets.
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What This Bill Actually Does
The SAFE Act adds a specific requirement to the Securities Exchange Act of 1934: when an issuer lists on a U.S. exchange, and in each annual report filed with the Commission and the exchange, the issuer must disclose whether the Government of the People’s Republic of China provided any financial support. If such support exists, the issuer must detail the conditions under which it was provided, including exports requirements, procurement restrictions, use of certain intellectual property, or pressures related to employment of CCP members or other government-linked influences.
The bill also requires disclosure about whether the issuer has any CCP committees, who sits on those committees, and the roles played by those employees. Finally, it requires disclosure about any officer or director who currently or previously held a position with the CCP or the PRC government, including the position title and location.
The SEC must, within 180 days of enactment, amend its rules to reflect these changes. This framework applies to initial listings and to ongoing annual reporting under section 13(a).
The Five Things You Need to Know
The bill adds an initial-listing disclosure on whether the PRC government provided financial support to the issuer and the form of that support (subsidies, loans, tax concessions, or other).
If support exists, the issuer must disclose the conditions attached to it, such as export requirements, procurement mandates, IP usage, or CCP-related employment conditions.
Disclosures must cover any CCP committees within the issuer, including which employees serve and their roles.
Officers or directors who hold or formerly held CCP or PRC-government positions must be disclosed, with the position title and geographic location.
SEC rulemaking to implement these disclosures must be completed within 180 days of enactment.
Section-by-Section Breakdown
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Short title
The act may be cited as the Secure America’s Financial Exchanges Act (SAFE Act).
Disclosure requirements added to Section 6(b)
The bill adds an 11th item to Section 6(b) of the Securities Exchange Act, requiring issuers to disclose whether the Government of the People’s Republic of China has provided financial support and the specifics of that support. It also requires disclosure of the conditions under which that support was provided, including export or procurement constraints, use of IP, and CCP employment considerations, as well as any CCP committees within the issuer and the employees who participate in them, with their roles.
Rulemaking deadline
Not later than 180 days after enactment, the Securities and Exchange Commission shall amend the Commission’s rules to implement the amendments made by subsection (a), ensuring the new disclosures are enforceable and reportable in filings.
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Explore Finance in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- U.S. investors holding or evaluating securities of issuers with PRC ties gain clearer information to assess geopolitical and governance-related risks.
- U.S. institutional investors and asset managers rely on governance and ownership disclosures to inform risk-adjusted pricing and portfolio decisions.
- Securities exchanges and the SEC gain enhanced visibility into issuer disclosures, aiding oversight and market integrity.
- Issuer compliance and legal teams receive a structured framework for collecting and reporting information, potentially reducing ambiguity in filings.
- National security and enforcement agencies obtain more data to monitor potential foreign government influence in critical markets.
Who Bears the Cost
- Issuers pursuing U.S. listings that have PRC government ties face higher upfront and ongoing compliance costs to gather, verify, and report disclosures.
- Legal and compliance teams must integrate new data collection processes, increasing workloads and potential system upgrades.
- Issuers with PRC-linked mechanisms or personnel may face heightened investor scrutiny or market perception risks.
- Securities exchanges and registrants incur administrative costs to support the expanded reporting regime and enforcement actions.
- Regulators may require additional resources to audit and verify the disclosures for accuracy and consistency.
Key Issues
The Core Tension
Balancing the transparency of foreign government influence against the costs, accuracy, and potential market impact of requiring such disclosures.
The bill creates a new layer of disclosure that hinges on the accuracy and completeness of information about foreign government connections. The practical challenge is defining and verifying what constitutes 'financial support' from the PRC government, what counts as 'conditions' attached to that support, and what qualifies as a 'committee' of the Chinese Communist Party within an issuer.
Verifying whether a director or officer has held a CCP or PRC-government role could raise questions about data collection, privacy, and the scope of disclosures. The heightened disclosure regime may impose significant compliance costs on issuers and could influence investor perceptions in ways that affect capital formation, particularly for firms with complex multinational structures.
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