January 14, 2021
WHAT HAPPENED?
On Jan. 6, 2021, the U.S. Securities and Exchange Commission issued a Risk Alert in response to an Executive Order regarding investments in certain Chinese companies. The Executive Order states that Chinese companies are increasingly using American capital to bolster China’s military and intelligence systems, which could create a national security threat to the U.S.
The order states that, as of Jan. 11, 2021, all individuals and entities are prohibited from trading securities and derivatives of certain Communist China military companies, including the tech company Huawei, electronics manufacturer Panda Electronics, and other corporations.
An exception to the order applies to transactions made for the purpose of divestment which occur through Nov. 11, 2021.
WHAT DOES THIS MEAN FOR ME?
If your firm trades Chinese securities or participates in any market activity involving the restricted companies named in the Executive Order, update your policies and procedures according to the new provisions. The SEC may begin asking questions about compliance with the Executive Order as part of routine examinations and your firm should be ready to address these requests.
Fairview is available for assistance if you have questions about whether your firm’s activity is in compliance with the Executive Order or have other related concerns. Contact us today for more information about what we can do for your firm.
