New Bill Forces Investment Advisers to Publicly Disclose Exposure to China, Russia, and Other Adversaries

The “Disclosing Investments in Foreign Adversaries Act of 2025” is a piece of legislation that aims to shine a powerful spotlight on where U.S. capital is flowing, particularly into countries designated as geopolitical rivals—think China, Russia, Iran, and North Korea. This bill mandates two major new transparency requirements for the financial world, focusing on private funds and large private stock offerings. Essentially, the government wants to know exactly how much American money is tied up in these regions, and it’s making the firms that manage that money tell everyone.

The Private Fund Scorecard: Who’s Investing Where?

If you’re a financial adviser managing private funds—like hedge funds or private equity—and you oversee $150 million or more in assets, get ready for a new annual chore. This bill requires these “covered investment advisers” to file a report with the Securities and Exchange Commission (SEC) detailing the total value of their private fund assets that are “in a country of concern.” This isn't just about where the money is incorporated; the SEC will look at factors like whether the company has employees or a physical presence in the country, or if it gets the “plurality of its sales” from that country. For advisers, this means a significant new compliance lift, calculating exposure based on these new, somewhat subjective metrics.

Here’s the part that hits the public: the SEC must then take this data and publish an annual report listing every single covered investment adviser that has any exposure to these countries. It will also show the percentage of their private fund assets tied up there. For the average investor, this is huge. While you might not see exactly what stocks your retirement fund owns, this provides an unprecedented, public look at which firms are funneling significant capital into geopolitical hotspots. This is all about national security meeting portfolio risk, making it clear who is playing in potentially risky territories.

New Rules for the Big Private Fundraisers

The second major change targets how companies raise large amounts of money privately, outside of the standard public stock market. If a company conducts a private securities offering—like those structured under Rule 506(b) or Regulation S, which are common ways for startups or large corporations to raise capital quickly—and the offering totals $25 million or more, or $50 million over a year, they now have to file a detailed report with the SEC. This is a big deal for companies that rely on these exemptions to raise funds quietly.

Specifically, the company must disclose whether it is associated with an entity that is incorporated in a country of concern or has most of its assets there. Crucially, they must also report the intended use of the proceeds, breaking down the percentage of the money they plan to invest in each country and industry. If a tech startup is raising $50 million and plans to spend 40% of it building a new factory in a country of concern, that information will now be public.

The Real-World Impact: Cost, Scrutiny, and Authority

For the financial industry, this bill means new administrative costs. Covered investment advisers will have to dedicate significant time and resources to track, define, and report these assets, which could eventually translate into slightly higher fees for private fund investors. For issuers conducting large private offerings, the days of quiet fundraising are over if they have ties or investment plans in adversarial nations. This enhanced scrutiny is the whole point: to give policymakers and the public a clear picture of capital flows that could pose a national security risk.

One thing to watch closely is the power this bill hands to the SEC. Not only does the SEC get to define which jurisdictions fall under the umbrella of a “country of concern” (in consultation with the State and Treasury Departments), but it also gains the authority to “set conditions to limit future use of private offerings” for companies that fail to comply. That’s a powerful tool, potentially allowing the SEC to effectively restrict a company’s access to common fundraising methods if they don’t follow the new rules. This bill is a clear signal that when it comes to capital flowing into geopolitical rivals, transparency is becoming mandatory, with real consequences for those who don't comply.