S. 5642: Know Your Sanctioned Securities Act

This bill would require the Securities and Exchange Commission (SEC) to create a rule, within 180 days after enactment, that changes how certain stocks are labeled.

What the bill would do

• It would require the SEC to add the letters “CMC” to the ticker symbols of securities issued by any company that is on the Department of Defense list of Chinese military companies.
• If a company is later removed from that Defense Department list, the SEC would have to remove the “CMC” label from its ticker symbol.

Plain-English effect

In practical terms, the bill would make it easier for investors and market participants to identify stocks or other securities tied to companies the U.S. government has designated as Chinese military companies. The bill does not ban trading in those securities or directly restrict purchases or sales; it changes the way they are identified in the market.

Relevant Companies

• BABA — Alibaba Group Holding Ltd. could be affected if any of its securities are on the relevant Defense Department list, because the bill would require a ticker modifier to be added to those securities.
• BIDU — Baidu, Inc. could be directly affected in the same way if its securities are covered by the list.
• JD — JD.com, Inc. could be directly affected if any of its securities are designated under the list.
• PDD — PDD Holdings Inc. could be affected if its securities are covered by the designation list.
• NIO — NIO Inc. could be affected if its securities are included on the list of Chinese military companies.
• XPEV — XPeng Inc. could be directly affected if its securities are designated under the list.