Sen. Rick Scott and Rep. John Moolenaar are pressing the Securities and Exchange Commission to restrict sanctioned Chinese military companies’ access to U.S. capital markets.
The two GOP lawmakers sent a letter Thursday to SEC Chair Paul Atkins citing the Department of Defense’s June addition of 65 entities to its list of Chinese military companies operating directly or indirectly in the U.S.
While the list, called the Section 1260H List, complicates access to government contracts, it is not a blocking sanctions list. U.S. persons and entities are not legally prohibited from engaging in commercial dealings or investing in these firms.
Certain companies on the list continue to access U.S. capital markets, said Mr. Scott of Florida and Mr. Moolenaar of Michigan.
“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 letter said.
The lawmakers called on the SEC to establish clearer investor warnings for sanctioned companies and impose temporary trading suspensions on securities issued by such companies.
They also suggested that the SEC temporarily suspend trading in the securities of any company headquartered in, or beneficially owned by, a “foreign country of concern” as soon as that company is added to a U.S. sanctions list. The suspension would last up to 10 business days, giving regulators time to decide whether further action is warranted.
A temporary 10-business-day suspension would provide the SEC with a “reasonable opportunity to assess whether additional or more permanent action is warranted, while signaling to the market that designation carries consequences,” Mr. Scott and Mr. Moolenaar wrote.
This letter is the latest in an ongoing campaign, as both lawmakers have sent a string of similar letters to Mr. Atkins going back well over a year.
A joint letter in May of last year called on the SEC to begin delisting Chinese companies, a July 2025 letter demanded a briefing on Public Company Accounting Oversight Board audit-inspection gaps, and a December letter urged the SEC to “aggressively enforce existing laws” and remove Chinese companies from U.S. exchanges.
Much of their push centers on the Holding Foreign Companies Accountable Act, a different and more consequential legal mechanism than the 1260H list.
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