Restrictions on Trading Securities and Related Derivatives of Some Chinese Companies

On November 12, 2020, the American President Trump issued an Executive Order (「EO」) 13959 prohibiting U.S. persons from engaging in 「any transaction in publicly traded securities, or any securities that are derivative of, or are designed to provide investment exposure to such securities, of any Communist Chinese military company (「CCMC」). On June 3, 2021, the American President Biden issued EO 14032 that amended EO 13959 and imposed substantially similar restrictions on investments in 59 Chinese Military Industrial Complex Companies (「CMICs」) identified in the annex to EO 14032. 

EO 14032 prohibits U.S. persons from engaging in 「the purchase or sale of any publicly traded securities, or any publicly traded securities that are derivative of such securities or are designed to provide investment exposure to such securities」 of any entity identified as a CMIC. CCMCs that remain subject to EO 13959, as amended by EO 14032, are now listed as CMICs.

IT IS YOUR RESPONSIBILITY TO ASSESS YOUR HOLDINGS AND DETERMINE WHETHER THEY HAVE A DIRECT, INDIRECT, OR DERIVATIVE OWNERSHIP INTEREST IN ANY OF THE COMPANIES DESIGNATED AS A CMIC.

You may review EO 14032 [1] for the definition of a CMIC. The list of persons subject to the order is available as the Non-SDN Chinese Military-Industrial Complex Companies List (「NS-CMIC List」) and is available here: NS-CMIC List [2].

The order’s prohibitions take effect beginning at 12:01 a.m. eastern daylight time on August 2, 2021, with respect to any person listed in the Annex to the order. Restrictions applicable to an entity identified in the future as a CMIC will take effect at 12:01 a.m. EDT 60 days after its identification and addition to the NS-CMIC List. 

United States persons have until 12:01 a.m. eastern daylight time on June 3, 2022 to divest any CMIC-restricted securities listed on the Annex to the order. For entities identified in the future as CMIC-restricted, U.S. persons have 365 days to divest after the addition of the entities to the NS-CMIC List. 

The above information is for reference only, and does not constitute an offer to sell, transact or solicitation of an offer to purchase or transact any investment product or service.

[1] https://www.federalregister.gov/documents/2021/06/07/2021-12019/addressing-the-threat-from-securities-investments-that-finance-certain-companies-of-the-peoples

[2] https://home.treasury.gov/policy-issues/financial-sanctions/consolidated-sanctions-list/ns-cmic-list