The New York Stock Exchange will delimit three of China’s largest telecommunications carriers, which by order of the US government prohibit Americans from investing in firms.
NYSE said, at the latest, it will suspend trading in securities issued by China Mobile, China Telecom Corp.
, And China Unicom Hong Kong Limited
January 11 at 4 am. It will soon work four days if the depository trust and clearing corp does not confirm that the clearinghouse will dispose of trades made on January 7 and January 8.
NYSE said it would stop trading in funds listed on the Exchange Arca Exchange and in exchange-traded products if it held restricted stock.
On Friday, China Unicom said it would issue a statement at the appointed time. China Mobile and China Telecom did not immediately respond to requests for comment.
An executive order signed by President Trump in November would prohibit Americans from investing in a list of companies that the US government says supplies and supports China’s military, intelligence and security services. The ban is starting on January 11 and investors have until November to divest their holdings.
The list currently includes 35 companies — including China’s largest chip maker — as well as surveillance, aerospace, shipbuilding, construction and technology companies.
The Wall Street Journal reported in December that it was not initially clear how the order blacklisted subsidiaries as well as parent companies and US government leaders.
However, this week, the Treasury Department said that if they owned or controlled the nominee company – they would add subsidiaries to the blacklist. The Treasury Office of the Foreign Assets Control, which handles economic sanctions, said the ban covered derivatives and depository receipts, as well as exchange-traded funds, index funds, and mutual funds.
Last month, the index compiler including MSCI Inc.
FTSE Russell and S&P Dow Jones Indis said they would remove some Chinese shares from their benchmark due to the order, although they did not exclude shares issued by subsidiaries and affiliates.
China Mobile, which has a market value of about $ 117 billion, was not included in the original blacklist, although its parent, China Mobile Communications Group, was. Its US stock is lower than its Hong Kong stock securities, FactSet data show. Approximately 2.1 million US depository receipts traded on average over the past three months, compared with 34 million Hong Kong shares a day. Each ADR is equivalent to five ordinary shares in Hong Kong.
Other US initiatives may also bring more delimitation. Last month, Mr. Trump signed legislation that could drive Chinese companies out of the US markets if US regulators cannot inspect their audits within three years. Some Chinese companies, including Alibaba Group Holding Limited
And JD.com Inc.
Have already gained secondary listing in Hong Kong, which may help to blunt the effect of such action.
Write Chong Koh Ping at [email protected]
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