NYSE reverses course, halts delisting of Chinese communications service providers

In an abrupt about face, the New York Stock Exchange (NYSE) says it will not delist shares of Chinese service providers China Telecom Corp. Ltd. (NYSE:CHA), China Mobile Ltd. (NYSE:CHL), and China Unicom (Hong Kong) Ltd. (NYSE:CHU) after all. The stock exchange had announced December 31, 2020, that it would halt trading in the three companies no later than January 11, 2021, to comply with Executive Order 13959, which prohibits any transaction in publicly traded securities, derivatives, and other investment activities in companies deemed by the Secretary of Defense to be a “Communist Chinese military company” (CCMC; see “NYSE to delist China Mobile, China Telecom, and China Unicom”). However, the exchange now says that “further consultation with relevant regulatory authorities” has revealed that delisting isn’t required.

In making the announcement, the NYSE cited Office of Foreign Assets Control (OFAC) FAQ 857. The FAQ states that subsidiaries of a CCMC would be subject to the restrictions imposed within Executive Order 13959 sixty days after such subsidiaries are added to a list the OFAC intends to create and post. To make the list, a subsidiary must be either 50% or more owned by one or more CCMCs or determined to be a CCMC by the Secretary of Defense, in consultation with the Secretary of the Treasury.

The NYSE said it will continue to evaluate how Executive Order 13959 might apply to the three services providers and their listing status.

Foreign Ministry Spokesperson Hua Chunying, who had condemned the delisting procedure yesterday, was only slightly mollified by the reversal. “I would like to stress again that the position of the United States as an international financial hub hinges on global companies and investors trusting the inclusiveness and certainty of its rules and mechanisms,” she commented in the ministry’s daily briefing earlier today. “Lately some political forces in the United States have been wantonly suppressing foreign companies listed in the country, exposing an arbitrary and capricious uncertainty in its rules and mechanisms. The suppression against Chinese companies will have very limited direct impact on them, but will harm the national interests and image of the United States and the global standing of the American capital market. We hope the United States will respect rule of law and market principles and do things conducive to upholding order in the global financial market, protecting investors' lawful rights and interests, and promoting the steady development of the global economy.”

For related articles, visit the Business Topic Center.

For more information on high-speed transmission systems and suppliers, visit the Lightwave Buyer’s Guide.

To stay abreast of fiber network deployments, subscribe to Lightwave’s Service Providers and Datacom/Data Center newsletters.