Bill Overview
Title: SAFE Act
Description: This bill requires an issuer of securities, as a condition of listing its securities on a national exchange, to disclose (1) any financial support from China and the terms of any such support, and (2) whether any officer or director holds or previously held a position with the Chinese government or with the Chinese Communist Party.
Sponsors: Sen. Scott, Rick [R-FL]
Target Audience
Population: People working in or investing in companies that may be impacted by the listing requirements on US exchanges
Estimated Size: 20000000
- The bill targets issuers of securities listed on national exchanges in the United States.
- This affects companies that receive financial support from China or have executives with ties to the Chinese government or Communist Party.
- Companies involved in such financial exchanges typically have a significant number of stakeholders including shareholders, employees, and associated businesses.
- The global financial exchange market is vast, with many international firms participating in US exchanges.
- The disclosure requirements could impact the valuation of companies and thus indirectly affect investors worldwide.
Reasoning
- The target population includes investors, employees, and associated businesses of companies impacted by changes in listing requirements due to Chinese financial ties.
- The policy implementation and compliance might impact company valuations, affecting shareholder value and potentially employee job security.
- Individual investors might reevaluate their portfolios based on the perceived stability and financial health revealed through these new disclosures.
Simulated Interviews
Investment Banker (New York, NY)
Age: 47 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 6/20
Statement of Opinion:
- This policy will increase transparency, which can be beneficial for investors.
- However, this could make it challenging for some companies I work with to access American public markets.
- Clients might delay IPOs due to increased scrutiny about Chinese ties.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 9 |
Technology Startup CEO (San Francisco, CA)
Age: 35 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- This could complicate our path to going public on a US exchange.
- If our Chinese investors are seen as a risk, it might devalue our future IPO.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 8 |
| Year 2 | 6 | 8 |
| Year 3 | 7 | 8 |
| Year 5 | 8 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 10 |
Oil Industry Executive (Houston, TX)
Age: 42 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 4/20
Statement of Opinion:
- Our industry is already under pressure, and this policy adds another layer of complexity.
- The trust of our investors might be tested when they hear about any undisclosed Chinese partnerships.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 5 |
| Year 2 | 4 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 7 |
| Year 20 | 6 | 8 |
Software Engineer (Seattle, WA)
Age: 29 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 2.0 years
Commonness: 7/20
Statement of Opinion:
- If the company delays going public due to this policy, our stock options could be affected.
- I support transparency but hope it doesn't hurt our business prospects.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 8 |
| Year 20 | 8 | 9 |
Retiree / Individual Investor (Miami, FL)
Age: 58 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- As an investor, I am concerned about how this policy might shake up the market.
- It's crucial, though, to know where money and influence in companies are coming from.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 7 | 8 |
| Year 5 | 7 | 8 |
| Year 10 | 8 | 9 |
| Year 20 | 8 | 9 |
University Professor (Chicago, IL)
Age: 62 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 4.0 years
Commonness: 3/20
Statement of Opinion:
- This policy provides an excellent case study for my students, illustrating real-world finance challenges.
- It may disrupt some market dynamics, affecting research outcomes positively.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 8 |
| Year 20 | 7 | 9 |
Financial Analyst (Boston, MA)
Age: 50 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 4/20
Statement of Opinion:
- This legislation will affect how we rate companies with Chinese affiliations.
- It could alter perceived risk profiles, affecting credit ratings and our analyses.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 9 |
| Year 20 | 9 | 9 |
Film Production Executive (Los Angeles, CA)
Age: 33 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- Our industry depends greatly on foreign money, and these disclosures might scare Chinese investors.
- This policy might impact our ability to secure financing for future projects.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 7 |
| Year 20 | 6 | 8 |
Freelance Journalist (Portland, OR)
Age: 24 | Gender: other
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 10/20
Statement of Opinion:
- I'm interested in how this will shape the narratives around foreign direct investment.
- It's vital to understand corporate ties as they impact markets from global to local.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Retired Corporate Executive (Phoenix, AZ)
Age: 69 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 2/20
Statement of Opinion:
- I've seen policies like these shift market conditions dramatically.
- Depending on how it's implemented, it could either protect investments or unsettle the market.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 8 |
| Year 10 | 7 | 9 |
| Year 20 | 8 | 9 |
Cost Estimates
Year 1: $15000000 (Low: $10000000, High: $20000000)
Year 2: $15800000 (Low: $10500000, High: $21000000)
Year 3: $16600000 (Low: $11100000, High: $22000000)
Year 5: $17800000 (Low: $12000000, High: $23500000)
Year 10: $20800000 (Low: $14000000, High: $27000000)
Year 100: $40000000 (Low: $28000000, High: $52000000)
Key Considerations
- The impacts of the disclosure requirements on investor behavior are challenging to predict and heavily dependent on market perceptions.
- The compliance costs could vary significantly between different companies depending on their existing disclosure practices and ties to Chinese entities.
- There could be geopolitical ramifications affecting international investment and sentiment towards US markets.