Treasury Issues Guidance on Divesting From Banned Chinese Military Companies

U.S. people and entities do not need to divest their holdings in publicly traded securities of Chinese military companies by Jan. 11 despite President Donald Trump’s Nov. 12, 2020, executive order banning future investments in the companies, the Treasury Department said Jan. 4 (see 2011130026). Treasury said U.S. “persons,” including U.S. funds and “related market intermediaries and participants,” are not required by Jan. 11, 2021, to divest from securities of the entities listed by the order, including “securities that are derivative of, or are designed to provide investment exposure to, such securities.” People and companies may make certain divestments involving the Chinese military companies through Nov. 11, 2021, as long as those securities were held as of 9:30 a.m. EST Jan. 11, 2021, the order said. Treasury recently issued guidance on what types of investment transactions are banned (see 2012290017).