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NEW YORK / WASHINGTON (REUTERS) – The New York Stock Exchange (NYSE) is beginning the process of delisting the securities of three Chinese telecommunications companies, after President Donald Trump last month banned US investments in Chinese companies which Washington says are owned or controlled by the military. .
The NYSE move, which will limit access for US investors, follows global index providers MSCI Inc, S&P Dow Jones Indices and FTSE Russell and Nasdaq removing various Chinese companies from their indices.
It’s “a modest step, but at least an awakening to risks related to national security and human rights,” said Roger Robinson, a former White House official who supports curbing Chinese access to American investors.
The NYSE said the issuers, China Telecom Corporation Limited, China Mobile Limited and China Unicom (Hong Kong) Limited, were no longer suitable for listing, as the order prohibits any transactions in securities “designed to provide investment exposure to such securities,” from any communist. Chinese military company, by any American person. “
The order sought to enforce a 1999 law that ordered the Defense Department to compile a list of Chinese military companies. The Pentagon, which only served the mandate this year, has so far appointed 35 companies, including oil company CNOOC Ltd and China’s top chipmaker Semiconductor Manufacturing International Corp.
China has condemned that ban, and fund managers have said it could benefit non-US investors able to get the shares back.
The NYSE said it would suspend trading of the shares on Jan.7 or 11. Issuers have the right to a review of the decision. Each of the telecommunications companies named by the NYSE is also listed in Hong Kong.
China Telecom is also coming under fire from the US Federal Communications Commission (FCC), which said in early December that it had started the process of revoking the company’s authorization to operate in the United States.
The companies could not be reached for comment on a Chinese holiday.
Ties between Washington and Beijing have grown increasingly antagonistic over the past year as the world’s two major economies argued over Beijing’s handling of the coronavirus outbreak, the imposition of a national security law in Hong Kong, and the growing tensions in the South China Sea.
Separately, President Donald Trump signed a law last month that would kick Chinese companies off American stock exchanges unless they adhere to American auditing standards. Market participants said this would intensify the rush for US-listed Chinese companies to seek backup copies in Hong Kong.
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