Cboe reminds ETP issuers to comply with Executive Order 13959
Cboe BZX Exchange, Inc. has published a notice to remind issuers of any Cboe-listed exchange traded product (ETP) that includes in its portfolio a Communist Chinese military company (CCMC) of their obligation to comply with Executive Order 19359.
Executive Order 13959 (EO 13959) of November 12, 2020 prohibits, at 9:30 a.m. Eastern Standard Time (EST) on January 11, 2021, any transaction by a United States person in publicly traded securities, or any securities that are derivative of, or are designated to provide investment exposure to, companies identified as of the date of EO 13959 as a CCMC. This same prohibition applies to publicly traded securities, or any securities that are derivative of, or are designed to provide investment exposure to such securities, of companies identified after the date of EO 13959 beginning at 9:30 a.m. EST on the date that is 60 days after such identification.
EO 13959 further permits purchases for value or sales solely to divest, in whole or in part, from securities held by any United States person, in accordance with timeframes specified in the Executive Order.
Cboe further reminds its listed issuers of their obligation to comply with Cboe’s rules related to material news and disclosure obligations under Rule 14.6. In Cboe’s view, an issuer’s determination that a transaction in its listed securities would violate EO 13959 is material news that must be immediately disclosed to the marketplace in accordance with applicable Cboe rules, and as the listing market, Cboe would expect to halt trading in the listed security on all U.S. exchanges based on that news.
Earlier in January, NYSE published an updated guidance on NYSE Group actions to comply with Executive Order 13959.
On January 5, 2021, the Department of Treasury’s Office of Foreign Asset Control (OFAC) provided additional, specific guidance to the NYSE stating that U.S. persons cannot engage in certain transactions (as specified in EO 13959) in the ADRs of China Telecom Corporation Limited (CHA), China Mobile Limited (CHL), and China Unicom (Hong Kong) Limited (CHU) after 9:30 a.m. eastern standard time on January 11, 2021.
Accordingly, NYSE Regulation has announced that it will move forward with delisting the three issuers that was initially announced on December 31, 2020 to comply with U.S. law. NYSE will suspend trading in these issuers at 4:00 a.m. eastern standard time on January 11, 2021.