Frequently Asked Questions

865. May market intermediaries and other participants facilitate divestment from publicly traded securities of Communist Chinese military companies, including divestment by investment fund managers?

Answer

Yes.  Market intermediaries and other participants may engage in ancillary or intermediary activities that are necessary to effect divestiture during the relevant wind-down periods or that are otherwise not prohibited under the E.O.  Transactions by U.S. persons (including investors and intermediaries) involving investment funds that are seeking to divest during the relevant wind-down periods to ensure compliance with the E.O. are permitted.

As explained in FAQ 861, under E.O. 13959, 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, as defined in E.O. 13959, is prohibited regardless of such securities’ share of the underlying index fund, ETF, or derivative thereof.  FAQ 862 also notes that U.S. funds are not required to divest covered securities of companies identified in the Annex to E.O. 13959 by January 11, 2021.  Divestment must be completed by November 11, 2021.

 

Date Released
January 6, 2021