H.R. 3197 — Fortifying U.S. Markets From Chinese Military Aggression Act

This section establishes a permanent advisory committee to the Financial Stability Oversight Council (FSOC)—the Financial Stability Oversight Council Advisory Committee on Economic Fallout From Chinese Military Aggression Towards Taiwan—to study market implications and vulnerabilities related to such aggression and to facilitate communication among policymakers, agencies, and capital market participants to mitigate potential economic strain and volatility. The committee consists of a designee from the Securities and Exchange Commission, a designee from the Commodity Futures Trading Commission, and 10 appointees by the FSOC from capital markets participants (e.g., market makers, asset managers, exchanges, institutional investors) or China geopolitical risk experts, with a market maker serving as chair; it must meet in person at least twice annually and produce an annual study, recommendations, and analysis presented publicly to the FSOC (with national security portions in closed session). This section further requires the FSOC to issue an annual public report analyzing the committee's work, detailing (1) specified market vulnerabilities (e.g., U.S. banking safety and soundness, potential global market losses, trading halt capacity, impacts on Chinese/Taiwanese U.S. listings, China's potential reduction of U.S. Treasury holdings, and total estimated U.S. economic costs) and (2) regulator recommendations to enhance market resilience (e.g., government coordination, actions to limit blockade/invasion impacts, testing of circuit breakers, and further stakeholder engagement).