The OTC, a major U.S. over-the-counter securities trading platform, has announced that it will stop trading in the stocks of 12 Chinese companies under a U.S. government executive order banning investments in Chinese companies with ties to the Chinese military, further limiting U.S. investors’ access to the Chinese market.
According to Yahoo Finance, the OTC said it will prohibit trading in nine Chinese stocks, including China Railway Construction (01186.HK), Nanjing Panda Electronics (00553.HK) and Semiconductor Manufacturing International (00981.HK), from Jan. 7, and will prohibit trading in three other Chinese stocks on Jan. 11, and will continue to evaluate whether it needs to prohibit trading in other Chinese stocks based on the U.S. Treasury Department’s Office of Foreign Assets Control guidelines. The OTC will continue to evaluate the need to prohibit trading in other Chinese stocks in accordance with the U.S. Treasury Department’s Office of Foreign Assets Control guidelines.
It is reported that OTC has 11,000 stocks for investors to buy and sell, most of which are shares that do not meet the listing requirements of major U.S. exchanges.
Last November, President Trump issued an investment ban executive order prohibiting U.S. companies or individuals from investing in Chinese companies owned or controlled by the Chinese Communist Party’s military. Currently, the U.S. government has blacklisted 35 Chinese companies owned or controlled by the Communist Party’s military and is considering including more companies, including Alibaba and Tencent.
Index providers including S&P Dow Jones Indices, FTSE Russell and MSCI Ming Sheng have also removed Chinese companies involved in the Communist Party’s military from their indexes following the U.S. executive order.
According to Reuters, people familiar with the matter said Trump administration officials plan to meet on Thursday afternoon (Jan. 7) to discuss expanding the investment ban on China. The executive order prohibits Americans from investing in Chinese companies with military backgrounds.
Officials from the Defense, State and Treasury departments will consider adjustments to the executive order, which was issued in November, at the meeting. One adjustment that may be discussed is a draft amendment that would specify that U.S. investors must fully divest their positions in blacklisted companies by Nov. 11, 2021, two sources said.
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