[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 3286 Introduced in Senate (IS)]

<DOC>






118th CONGRESS
  1st Session
                                S. 3286

To require the Securities and Exchange Commission to amend the rules of 
 the Commission relating to disclosures by advisers of private funds, 
                        and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            November 9, 2023

    Mr. Casey (for himself and Mr. Scott of Florida) introduced the 
 following bill; which was read twice and referred to the Committee on 
                  Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
To require the Securities and Exchange Commission to amend the rules of 
 the Commission relating to disclosures by advisers of private funds, 
                        and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Disclosing Investments in Foreign 
Adversaries Act of 2023''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Commission.--The term ``Commission'' means the 
        Securities and Exchange Commission.
            (2) Country of concern.--The term ``country of concern''--
                    (A) has the meaning given the term ``covered 
                nation'' in section 4872(d) of title 10, United States 
                Code; and
                    (B) includes a jurisdiction that the Commission, in 
                consultation with the Secretary of State and the 
                Secretary of the Treasury, determines to be subject to 
                the political and legal control of a covered nation, as 
                defined in section 4872(d) of title 10, United States 
                Code.
            (3) Covered entity.--The term ``covered entity'' means an 
        entity or person that is required to file Form PF.
            (4) Exempt reporting adviser.--The term ``exempt reporting 
        adviser'' means an investment adviser described in section 
        275.204-4(a) of title 17, Code of Federal Regulations, or any 
        successor regulation.
            (5) Form adv.--The term ``Form ADV'' means the form 
        described in section 279.1 of title 17, Code of Federal 
        Regulations, or any successor regulation.
            (6) Form pf.--The term ``Form PF'' means the form described 
        in section 279.9 of title 17, Code of Federal Regulations, or 
        any successor regulation.
            (7) Private fund.--The term ``private fund'' has the 
        meaning given the term in section 202(a) of the Investment 
        Advisers Act of 1940 (15 U.S.C. 80b-2(a)).
            (8) Private fund assets.--The term ``private fund assets'' 
        has the meaning given the term in section 275.204(b)-1 of title 
        17, Code of Federal Regulations, or any successor regulation.

SEC. 3. ENHANCED DISCLOSURE REQUIREMENTS FOR ADVISERS OF PRIVATE FUNDS.

    (a) Requirements.--
            (1) In general.--Not later than 1 year after the date of 
        enactment of this Act, the Commission shall amend Form PF and 
        Form ADV, and the rules of the Commission governing the 
        submission of Form PF and Form ADV, to, subject to paragraph 
        (2), require each covered entity and each exempt reporting 
        adviser to annually disclose when submitting Form PF or Form 
        ADV, respectively, the total private fund assets in countries 
        of concern attributable to the private funds advised by the 
        covered entity or exempt reporting adviser, as applicable, 
        which shall be broken down by the percentage of those assets in 
        each country of concern.
            (2) Application.--For the purposes of paragraph (1), the 
        Commission shall determine whether a private fund asset is in a 
        country of concern based on--
                    (A) the amount of capital that is invested in an 
                entity (including a subsidiary of an entity)--
                            (i) that has a physical presence or 
                        employees in that country of concern; or
                            (ii) the plurality of the sales of which 
                        are from that country of concern; and
                    (B) the proportion of the total assets and 
                liabilities of an entity described in subparagraph (A) 
                that are located in that country of concern.
    (b) Reporting by Commission.--
            (1) Publicly available reports.--
                    (A) In general.--Not later than 1 year after the 
                date on which the Commission makes the amendments 
                required under subsection (a), and not less frequently 
                than annually thereafter, the Commission shall prepare 
                and make publicly available a report containing a list 
                of covered entities and exempt reporting advisers that, 
                for the period covered by the report, have disclosed 
                more than 0 private fund assets under Form PF or Form 
                ADV (as amended pursuant to that subsection) in at 
                least 1 country of concern, which shall be aggregated 
                by the covered entity or exempt reporting adviser 
                making that disclosure.
                    (B) Additional requirements.--Each report prepared 
                and made available by the Commission under subparagraph 
                (A) shall--
                            (i) be aggregated by covered entity or 
                        exempt reporting adviser; and
                            (ii) include the percentage of private fund 
                        assets disclosed by a covered entity or exempt 
                        reporting adviser, as applicable.
            (2) Rule of construction.--Nothing in this subsection may 
        be construed to permit the Commission to make available any 
        information that appears on Form PF or Form ADV other than the 
        information that is included on Form PF or Form ADV as a result 
        of the requirements under subsection (a).

SEC. 4. EXEMPTED TRANSACTIONS.

    (a) In General.--The Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.) is amended by inserting after section 13A (15 U.S.C. 78m-1) 
the following:

``SEC. 13B. DISCLOSURE REQUIREMENTS RELATING TO CERTAIN EXEMPTED 
              TRANSACTIONS.

    ``(a) Definitions.--In this section:
            ``(1) Beneficial owner.--The term `beneficial owner' means 
        a person that is determined to be a beneficial owner under 
        section 240.13d-3 of title 17, Code of Federal Regulations, or 
        any successor regulation.
            ``(2) Country of concern.--The term `country of concern'--
                    ``(A) has the meaning given the term `covered 
                nation' in section 4872(d) of title 10, United States 
                Code; and
                    ``(B) includes a jurisdiction that the Commission, 
                in consultation with the Secretary of State and the 
                Secretary of the Treasury, determines to be subject to 
                the political and legal control of a covered nation, as 
                defined in section 4872(d) of title 10, United States 
                Code.
            ``(3) Covered exempted transaction.--The term `covered 
        exempted transaction' means an offer or sale of a security that 
        is--
                    ``(A) exempt from registration under section 5 of 
                the Securities Act of 1933 (15 U.S.C. 77e); and
                    ``(B) structured or intended to comply with--
                            ``(i) section 230.506(b) of title 17, Code 
                        of Federal regulations, or any successor 
                        regulation;
                            ``(ii) sections 230.901, 230.902, and 
                        230.903 of title 17, Code of Federal 
                        Regulations, or any successor regulations; or
                            ``(iii) section 230.144A of title 17, Code 
                        of Federal Regulations, or any successor 
                        regulation.
    ``(b) Requirement.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, in the case of an issuer that conducts a covered exempted 
        transaction described in paragraph (2), that issuer shall 
        provide to the Commission, at such time and in such manner as 
        the Commission may prescribe, the following information:
                    ``(A) The identity of the issuer.
                    ``(B) The place of incorporation of the issuer.
                    ``(C) Whether the issuer is associated with at 
                least 1 consolidated entity, the plurality of the 
                assets of which are in a country of concern.
                    ``(D) Whether the issuer is associated with at 
                least 1 consolidated entity that is incorporated in a 
                country of concern.
                    ``(E) The amount of securities sold pursuant to the 
                covered exempted transaction and the net proceeds to 
                the issuer.
                    ``(F) The beneficial owners of the issuer.
                    ``(G) The intended use of the proceeds from the 
                covered exempted transaction, including each country in 
                which the issuer intends to invest those proceeds, 
                which shall be broken down by the percentage of net 
                proceeds by industry within each such country.
                    ``(H) The exemption the issuer relies on with 
                respect to the covered exempted transaction.
            ``(2) Particular covered exempted transaction described.--A 
        covered exempted transaction described in this paragraph is, 
        with respect to the issuer offering or selling the security 
        that is the subject of the covered exempted transaction, either 
        of the following instances:
                    ``(A) An offer or sale of securities in an amount 
                that is not less than $25,000,000.
                    ``(B) An offer or sale of a security such that the 
                offer or sale, together with all covered exempted 
                transactions by that issuer during the 1-year period 
                preceding the date on which the issuer offers or sells 
                the security, constitutes offers or sales in the 
                aggregate of an amount that is not less than 
                $50,000,000.
    ``(c) Authority To Revise and Promulgate Rules, Regulations, and 
Forms.--The Commission shall, for the protection of investors and fair 
and orderly markets--
            ``(1) revise and issue such rules, regulations, and forms 
        as may be necessary to carry out this section; and
            ``(2) issue rules to set conditions that limit the future 
        use of covered exempted transactions for issuers that do not 
        comply with the disclosure requirements of this section.
    ``(d) Applicability.--This section shall apply with respect to any 
covered exempted transaction that occurs on or after the date that is 1 
year after the date of enactment of this section.
    ``(e) Reports.--The Commission shall, on a quarterly basis, prepare 
and make publicly available a report that includes all information 
submitted by an issuer under this section during the quarter covered by 
the report, if that issuer--
            ``(1) is--
                    ``(A) incorporated in a country of concern; or
                    ``(B) incorporated outside of a country of concern 
                and is associated with at least 1 consolidated entity--
                            ``(i) the plurality of the assets of which 
                        are in a country of concern; or
                            ``(ii) that is incorporated in a country of 
                        concern; or
            ``(2) discloses in a filing made pursuant to this section 
        that the issuer intends to invest the proceeds from a covered 
        exempted transaction in a country of concern.''.
                                 <all>