SB 460

This bill prohibits the State of Wisconsin Investment Board from engaging in

securities transactions involving certain companies associated with China and Iran.

Under current law, federal Executive Order 14032 of June 3, 2021, imposes

certain restrictions related to the purchase or sale of securities in specified Chinese

companies.

This bill prohibits SWIB from purchasing or selling any publicly traded

security of a Chinese military-industrial complex company. The bill defines

“Chinese military-industrial complex company” as a company listed in the Annex to

Executive Order 14032 or later identified by the federal Secretary of the Treasury as

such a company. However, the bill allows SWIB, for specified periods, to divest from

prohibited securities already held by SWIB.

The bill also generally prohibits SWIB from investing in securities of any

company that 1) has outstanding loans or other commitments of credit to the

government of Iran; 2) maintains property or personnel, or has business operations,

in Iran; 3) contracts with the government of Iran or provides goods or services in Iran;

or 4) sells weapons, military technology, oil-production or mineral-extraction

equipment, or related goods with reasonable knowledge that they will be resold to

the government of Iran or redistributed into Iran. For purposes of the bill, the

government of Iran includes any company owned or controlled by Iran. If SWIB

maintains a prohibited investment on the effective date of the bill, SWIB must divest

itself of the investment within approximately one year. However, the investment

prohibition does not apply to investments made by external managers with whom

SWIB has contracted, investments in mutual funds and other commingled

instruments, and investments in private equity funds. In determining whether an

investment is prohibited, SWIB may rely on information about a company available

from a third-party screening service that utilizes criteria reasonably similar to the

criteria described in items 1 to 4 above.

The bill also requires SWIB to include, in an annual report that under current

law SWIB submits to the legislature, information relating to SWIB's efforts to satisfy

the requirements under the bill, including identification of companies in which

investment is prohibited and, as applicable, SWIB's status of divestment from these

companies.