United States: Executive Order 13959 as amended - Finance of Communist Chinese Military Companies – Notice to Investment Fund Agents
Following announcement A21002, Clearstream Banking1 reminds all Investment Fund Agents that effective
11 January 2021
the United States Executive Order 13959 (the “Executive Order”) prohibits United States persons2 from engaging in the following:
- Purchasing securities issued by companies on the Non-SDN Communist Chinese Military Companies List published by the OFAC; and/or
- Purchasing securities which are derivatives of, or providing an economic exposure to, such OFAC-listed securities (collectively, “CMC Securities”).
The restrictions are applicable industry-wide, and impact both Investment Fund Agents and the Asset Management community alike. Any investment funds which have investments in the relevant securities (regardless of the value or proportion of the overall portfolio) are in scope of this Executive Order.
Clearstream Banking herein expects all Investment Fund Managers and product issuers to adhere to these restrictions and ensure adherence to the Executive Order and ensure to have taken the following necessary steps:
- Funds have not purchased and will not purchase for value after 11 January 2021 any of the CMC Securities of companies identified in the Executive Order; and
- To the extent it maintains holdings of Sanctioned Securities prior to the effective date of the restrictions under the Order applicable to these CMC Securities, the Funds will seek to divest all holdings of the CMC Securities in accordance with the requirements of the Order, where applicable, or ensure the terms and conditions of the Funds impose investment restrictions in respect of U.S. persons.
Clearstream Banking moreover advises all Investment Fund Managers and issuers of structured products to ensure that they clearly communicate notice of this Executive Order to both existing and new investors. It is therein the responsibility of the investor to observe such restrictions as specified in the Clearstream Banking General Terms and Conditions and Customer Handbook.
U.S. persons are not required at this time to immediately sell their existing holdings, as the regulations permit divestment until 11 November 2021. After 11 November, new regulations may apply.
Further information
For further information, please contact Clearstream Banking Customer Service or your Relationship Officer.
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1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Banking AG (for Clearstream Banking AG customers using Creation Accounts), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.
2. A United States (U.S.) person is “a U.S. citizen, a U.S. permanent resident alien, an entity organised under the laws of the U.S. (including its foreign branches) or any individual or entity in the United States".