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U-U-turn: New York Stock Exchange backtracks on previous backtrack, will de-list China's biggest telcos after all

Treasury Department clarifies advice with a brief FAQ

The New York Stock Exchange (NYSE) has said it will de-list China's three largest telecommunications companies – China Mobile, China Unicom, and China Telecom – after all, having received updated guidance from US regulators.

The Wall Street bourse first proclaimed on 31 December it would remove the three aforementioned Middle Kingdom telcos. This, it said, was in order to comply with an executive action issued by President Trump in November. Executive Order 12959 prohibits US individuals from purchasing securities in businesses deemed to be linked to the Chinese military from 11 January.

On 4 January, the NYSE backtracked, citing updated guidance from the US regulators, although declined to provide a detailed rationale.

In a full 360˚ turn in less than a week, the NYSE today reverted to its original position, citing "new specific guidance" from the Treasury Department's Office of Foreign Assets Control (OFAC). Trades in securities belonging to the three outfits will be suspended at 4am EST on 11 January.

The Treasury Department published "clarification" with a fresh FAQ to its website explaining that Executive Order 12959 applies to businesses trading under names that closely match those previously listed, and includes derivatives or subsidiaries of proscribed businesses. Oh and it applies to "transactions in securities" of those firms, in case you didn't get the drift.

"Among other names, OFAC's current list includes (1) China Telecommunications Corp. / China Telecommunications; (2) China Mobile Communications Group / China Mobile Communications / China Mobile Communications Group Co Ltd; and (3) China United Network Communications Group Co Ltd / China United Network Communications Ltd," the Treasury Department's website states.

"These names closely match the names of China Telecom Corporation Limited (NYSE: CHA), China Mobile Limited (NYSE: CHL), and China Unicom (Hong Kong) Limited (NYSE: CHU)."

Shares in China Telecom were down by 3.04 per cent on the news. China Mobile and China Unicom fell 2.08 and 1.6 per cent respectively. ®

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