Executive Order (EO) 13959 Trading Restrictions

Overview

The following contains information about securities with an Office of Foreign Assets Control (OFAC) hold pertaining to Communist Chinese military companies (CCMC).

Background

On November 12, 2020 the President of the United States signed (EO) 13959, that as of January 11, 2021, bars U.S persons from entering into any investment transaction involving the securities of a company that has been identified as a Communist Chinese military company. On December 3, 2020, the US Government identified additional Communist Chinese military companies that are subject to the same restrictions beginning on February 1, 2021.

On December 28, 2020 OFAC published a list containing the names of entities identified in or pursuant to E.O. 13959 as Communist Chinese military companies, along with additional identifying information.  The list contains the previously identified entities as well as targeted subsidiaries.  Additionally, OFAC has indicated that additional entities may be added to the CCMC list and such entities are subject to the same restrictions barring U.S. persons from investing beginning 60 days from the date of the designation.  

To comply with the EO, E*TRADE will restrict trading in securities identified as in-scope for the E.O. beginning on January 8, 2021.

Reference: Executive Order 13959 of November 12, 2020 Addressing the Threat From Securities Investments That Finance Communist Chinese Military Companies

Non-SDN Communist Chinese Military Companies List

Restricted Securities

To comply with the EO, E*TRADE will restrict trading in securities identified as in-scope for the EO beginning on January 8, 2021. The restrictions will occur as follows:

Entities identified on November 12, 2020 will be restricted on January 8, 2021. The last day to trade the affected securities is January 7, 2021.

Restricted on January 8, 2021
Aviation Industry Corporation of China (AVIC)
China Aerospace Science and Industry Corporation (CASIC)
China Aerospace Science and Technology Corporation (CASC)
China Communications Construction Company (CCCC) (OTC: CCCGF and CCCGY)
China Electronics Corporation (CEC)
China Electronics Technology Group Corporation (CETC)
China General Nuclear Power Corp.
China National Chemical Corporation (ChemChina)
China National Chemical Engineering Group Co., Ltd. (CNCEC)
China National Nuclear Corp.
China North Industries Group Corporation (Norinco Group)
China Nuclear Engineering & Construction Corporation (CNECC)
China Railway Construction Corporation (CRCC) (OTC: CWYCF and CWYCY)
China Shipbuilding Industry Corporation (CSIC)
China South Industries Group Corporation (CSGC)
China Spacesat
China State Shipbuilding Corporation (CSSC)
China Three Gorges Corporation Limited
CRRC Corp. (OTC: CRRRF and CRCCY)
Dawning Information Industry Co (Sugon)
Hangzhou Hikvision Digital Technology Co., Ltd. (Hikvision)
Huawei
Sinochem Group Co Ltd
Inspur Group
Aero Engine Corporation of China
China Academy of Launch Vehicle Technology (CALT)
China Mobile Communications Group
China State Construction Group Co., Ltd.
China Telecommunications Corp.
China United Network Communications Group Co Ltd
Panda Electronics Group (OTC: NJGPF)
China Telecom Corporation Limited (NYSE: CHA) (OTC: CHJHF)
China Mobile Limited (NYSE: CHL) (OTC: CHLKF)
China Unicom (Hong Kong) Limited (NYSE: CHU) (OTC:CHUFF)

On January 6, 2021 NYSE announced their intention to delist the following securities from their exchange:

China Telecom Corporation Limited (NYSE: CHA)
China Mobile Limited (NYSE: CHL)
China Unicom (Hong Kong) Limited (NYSE: CHU)

On January 8, 2021 E*TRADE restricted trading in the following funds:

Hang Seng Investment Index Funds Series - Hang Seng H-Share Index ETF (HSXUF)
Hang Seng Investment Index Funds Series III - Hang Seng FTSE China 50 Index ETF (HGSFF)
Tracker Fund of Hong Kong (TAHKF)
Hang Seng Investment Index Funds Series II – Hang Seng Index ETF (HGSXF)
World Index Shares ETFS – CSI 300 China Tracker (WSEZF)
CHINAAMC ETF Series – CHINAAMC CSI 300 Index ETF (CHMCF)

Entities identified on December 3, 2020 are required to be restricted on February 1, 2021. However, E*TRADE made the decision to restrict trading in the following securities as of January 8, 2021 due to market participant decisions to restrict trading.

Semiconductor Manufacturing International Corp. (SMIC) (OTC: SMICY and SIUIF)

Restricted on January 29, 2021
China Construction Technology Co. Ltd. (CCTC)
China International Engineering Consulting Corp. (CIECC)
China National Offshore Oil Corp. (CNOOC) (NYSE: CEO) (OTC: CEOHF)

Entities identified on January 14, 2021 are required to be restricted on March 15, 2021. E*TRADE will restrict trading in the following securities on March 12, 2021. March 11, 2021 will be the last day to trade the securities.

Restricted on March 12, 2021
Xiaomi Corporation (OTC: XIACY and XIACF)
Luokung Technology Corp. (Nasdaq: LKCO)

Functionalities Available Prior to Restriction Date

Prior to restriction date, and subject to market conditions, customers may continue to hold and trade the affected securities.  Given the uncertainty about the length of the impending restriction, customers may choose to liquidate their positions in affected securities. E*TRADE will be restricting trading in the securities as of the dates noted above. However, market conditions may not permit customers to liquidate their positions.

Functionalities Available After Restriction Date

Once the restriction is entered, customers will not be able to enter new orders or liquidate positions in the affected securities.  The securities are not considered OFAC blocked property, still belong to the customer, and will remain in the customer’s account in a restricted status. Customer’s may choose to transfer affected securities to another firm. E*TRADE will continue to restrict the trading of the security until we are no longer obligated to do so pursuant to U.S. law or executive order.