Sen. Rick Scott, Rep. John Moolenaar Ask SEC Chairman Paul Atkins to Block Sanctioned CCP Companies’ Access to U.S. Markets

WASHINGTON, D.C.- Today, U.S. Senator Rick Scott and U.S. Rep. John Moolenaar, Chairman of the House Select Committee on China, sent a letter to Securities and Exchange Commission (SEC) Chairman Paul Atkins requesting the agency restrict sanctioned Chinese companies' access to U.S. capital markets to protect America's economy

On June 8, 2026, the Department of War issued a revised list of Chinese military companies operating directly or indirectly in the United States, as required by statute. The updated list expanded significantly from the prior year, adding 65 additional entities and representing the most comprehensive U.S. government assessment to date of companies that may support or contribute to the capabilities of the People's Liberation Army. However, certain companies identified on the Section 1260H list continue to access U.S. capital markets, allowing them to raise capital from American investors.

The lawmakers wrote said, "China has long sought to take advantage of American markets seeking to enrich themselves and threaten our national security. These Chinese companies, including those on the Chinese military company blacklist, have no business trading on U.S. exchanges. We respectfully urge the Commission to consider what actions within its existing authority might appropriately address the ability of these sanctioned companies to access U.S. capital markets and raise funds that may support Communist China's political, economic, or military objectives."

To address this problem, the lawmakers call on the SEC to establish clearer investor warnings, including a ticker symbol, for sanctioned companies from countries of concern, and leverage existing authority to impose temporary trading suspensions on securities issued by those companies.

This letter is a continuation of Senator Scott's efforts to untangle Communist China from the U.S. economy. As Chairman of the Senate Aging Committee, he has held multiple hearings to shed light on the national security risk Chinese involvement has in financial markets.

In April 2025, the Committee held a joint hearing with the U.S. House Select Committee on the Chinese Communist Party, "Financial Aggression: How the Chinese Communist Party Exploits American Retirees and Undermines National Security," to expose the significant threats posed by Communist China to American investments, with a focus on the urgent need for seniors to safeguard their retirement savings from the CCP's predatory practices.

On Wednesday of this week, Chairman Scott hosted a hearing titled, "Behind the Label: Foreign Ownership and Control in America's Drug Supply Chain" to expose the disturbing degree to which Communist China controls the drugs in America's medicine cabinets.

SCOOP: GOP lawmakers push for SEC to flag, suspend trading of Chinese military-linked stocks

Read the full letter HERE or below:

Dear Chairman Atkins:

On June 8, 2026, the Department of War (DOW) released a revision to the statutorily required Section 1260H list of Chinese military companies operating directly or indirectly in the United States.1 DOW's expansion of the 1260H list - adding 65 entities beyond last year's list - represents the most robust assessment of the threat posed by these companies to the U.S. These companies have no business trading on U.S. exchanges, and we respectfully urge the Commission to consider what actions within its existing authority might appropriately address the ability of these companies to access U.S. capital markets and raise funds that may support the People's Liberation Army's (PLA) modernization efforts.

The Securities and Exchange Commission (SEC) has broad oversight jurisdiction over American national exchanges by law and regulation. Section 23(a)2 of the Securities Exchange Act of 1934 (the "Exchange Act") authorizes the SEC to make such rules and regulations as necessary or appropriate to implement the Act. Section 6(b)(5)3 of the Exchange Act further provides that the rules of a national securities exchange must be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and to protect investors and the public interest. Additionally, Section 12(k) authorizes the Commission to summarily suspend trading in any security for a period not to exceed 10 business days where it determines such action is in the public interest, and necessary for the protection of investors.4 Under the Holding Foreign Companies Accountable Act (as amended), the SEC can also suspend trading of securities of foreign companies that fail to meet the same regulatory and transparency standards required of U.S. companies.

Accordingly, we encourage you to utilize your pre-existing authorities to initiate the following actions within 60 days of the postmarked date of this letter:

1). Initiate a Notice of Proposed Rulemaking (NPRM) to establish a ticker-level disclosure requirement for sanctioned issuers.

We would require U.S. national securities exchanges to append a standardized suffix or flag to the ticker symbol of any listed company within 30 days of that company's designation on any U.S. government sanctions list, including but not limited to the Section 1260H list of Chinese military companies. This designation should also be disclosed prominently in any Exchange Act periodic report (such as a Form 20-F or Form 6-K) filed with the Commission by the relevant issuer. Such a ticker-level flag would function analogously to existing exchange-assigned suffix codes that alert investors to material status changes, such as filing delinquencies or bankruptcy proceedings, and would provide investors with clear, visible notice of national security related designations.

The Chinese military companies to which this proposed rulemaking would apply include Alibaba Group (BABA, listed on the NYSE), Nio, Inc. ("NIO", listed on the NYSE), Baidu, Inc. (BIDU, listed on NASDAQ), and Hesai Group (HSAI, listed on NASDAQ). BYD Company and Tencent Holdings currently trade in U.S. markets through Over-the-Counter (OTC) American Depositary Receipts rather than direct exchange listings, and the Commission may wish to consider whether analogous disclosure requirements would be appropriate for OTC traded securities as well.

2). Utilize existing Section 12(k) authority to temporarily suspend trading upon sanctions designation.

Second, we request that the Commission temporarily suspend the trading of securities of any company headquartered in, or beneficially owned by an entity or government of, a foreign country of concern upon such company's addition to a sanctions list maintained by the U.S. government. 6 A temporary ten business day suspension would provide the Commission with a reasonable opportunity to assess whether additional or more permanent action is warranted, while signaling to the market that designation carries consequences. Section 12(k) expressly vests the Commission with discretion to act in the public interest and in the protection of investors, and this measured application of that authority would seem well within that mandate.

We respectfully request a written response by the close of business on July 23, 2026, indicating the Commission's assessment of and intentions with respect to these requests. Thank you for your consideration and for your service to the Commission.

Sincerely,

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