EXCLUSION LIST| PRESIDENTIAL ORDER 13959– CHINA MILITARY COMPANIES | Latest updated 06 July 2023

On 17 December 2020, Solactive AG published a Market Consultation on the US Presidential “Executive Order on Addressing the Threat from Securities Investments that Finance Communist Chinese Military Companies”; issued on November 12, 2020 (the “ORDER”).

It was concluded (https://www.solactive.com/result-of-market-consultation-presidential-order-chinese-companies-5th-january2021/) that the ORDER will have a significant impact on the investment processes of global investors (both, U.S. investors and non-U.S. investors) with regard to the investability of the AFFECTED SECURITIES.

Given these concerns and in order to ensure that Solactive Indices remain investible Solactive AG has decided to delete the AFFECTED SECURITIES from Solactive. The removal of the AFFECTED SECURITIES will be separately announced as extraordinary corporate actions and will be applied to Solactive administered Indices.

In addition, all securities deemed as AFFECTED SECURITIES will be listed in the below exclusion list (the “EXCLUSION LIST”) and generally excluded from the index universe or starting universe, respectively, of all Solactive Indices and will not be eligible in any index selection.

List of AFFECTED SECURITIES:

January 05, 2021. Solactive restricted date January 08, 2021: Initial restricted list

Update: January 07, 2021. Solactive restricted date January 12, 2021: Three additional securities

Update: January 11, 2021. Solactive restricted date January 15, 2021: Addition of CNOOC Ltd

Update: March 15, 2021: Tranche 5 Presidential Order sanctions were initially announced on January 14, 2021 to become effective by March 15, 2021. On March 14,2021 it was announced by OFAC that the restrictions for Xiaomi Corporation were temporarily suspended due to an ongoing court case, pending the outcome of the court action Solactive’s previously announced restriction will remain in place. Additionally Solactive will maintain the already announced restriction date for Luokung Technology Corp, and will not follow the delayed timeline resulting from the delisting of Luokong Technology Corporation (LKCO) and listing of Luokung Technology Corp. (LKCO) by the Secretary of Defense on March 9, 2021.

Update: May 18, 2021: On January 27, 2021 the US Treasury issues the General License 1A (authorizing activities that would otherwise be prohibited) for entities whose name closely matches, but does not exactly match, the name of a Communist Chinese military company as defined by section 4(a) of E.O. 13959, through 9:30 a.m. eastern daylight time, May 27, 2021. An extension was provided on May 18, 2021 by General License 1B, through June 11, 2021. The Below list of stocks are not currently restricted for Solactive indices but have been identified as potential candidates for exclusion following the lapsing of the existing general license. 

Update: May 27, 2021: Xiaomi Corporation, 1810.HK has been removed from Solactive’s exclusion list following the announcement on May 25, 2021, that the final decision of the U.S. District Court for the District of Columbia was to vacate the U.S. Department of Defense’s designation of Xiaomi Corporation as a “Communist Chinese Military Company”. Xiaomi Corporation will be available for future selection in all Solactive indices.

Update: June 7, 2021: E.O. 13959 has been updated and expanded. President Biden has listed 59 entities subject to the E.O.’s prohibition which make up the newly published NON-SDN CHINESE MILITARY-INDUSTRIAL COMPLEX COMPANIES LIST (NS-CMIC List). Solactive will be updating its restricted list in the coming days. The pending adaption’s for June 11th will not be applied. The implementation of any new restrictions is expected to take effect on August 02, 2021.

Update: June 11, 2021: Based on President Biden’s update to E.O. 13959 of June 03, 2021 (E.O. 14032) and the publication by the Department of the Treasury’s Office of Foreign Assets Control (OFAC) of the NS-CMIC List, Solactive has made several changes to its restricted list.

Solactive has removed the following five securities from the exclusion list, making them eligible for inclusion in future index compositions: 

• China United Network Communications Group Co Ltd
• CRRC Corp
• Dawning Information Industry Co (Sugon)
• ADVANCED MICRO-FABRICATION EQUIPMENT INC (AMEC)
• Luokong Technology Corp (LKCO)

The 11 Names that were originally restricted by Solactive and remain restricted under the update E.O. will retain their restricted status throughout.

24 additional names have been added to the exclusion list, with restriction taking effect prior to the Executive Order effective date of August 2, 2021.  

Update: July 09, 2021:  The effective date for removals of restricted stocks from Solactive Administered Indices has been set to (open) July 29, 2021.

Update: December 20, 2021:  On 16th December 2021 the CMIC list was extended, 8 additional instruments have been added to the Solactive exclusion list, with restriction taking effect on February 14th 2022.

Update: January 17, 2022:  Solactive added CHINA TELECOM CORP LTD A shares (CNE100004QG0 /  CNE100004QG0) to the restricted list; due to its name directly matching the previously restricted instrument 0728.HK/CNE1000002V2  specifically identified in the CMIC list. 
The restriction takes effect on January 20th 2022.

Update: July 12, 2022:  Solactive added CHINA MOBILE LTD A shares (CNE1000055G1) to the restricted list; due to its name directly matching the previously restricted instrument 0941.HK/HK0941009539 specifically identified in the CMIC list. 

Update: January 20, 2023:  Solactive added CNOOC LTD A shares (CNE100005980) to the restricted list; due to its name directly matching the previously restricted instrument 0883.HK/HK0883013259 specifically identified in the CMIC list. 

Update: July 03, 2023:  Solactive added CLOUDWALK TECHNOLOGY CO LTD A shares (CNE100005QP8) to the restricted list; due to its being specifically identified in the CMIC list.

Update: July 06, 2023: Hong Kong Stock Exchange added a HKD-RMB Dual Counter service, which meant that some securities now had two lines trading on Hong Kong Exchange, one line in RMB and another in HKD. The new lines of securities that were created from the HKD-RMB Dual Counter service were reviewed and flagged as restricted if necessary. Thus, Solactive added China Mobile Ltd (80941.HK) and CNOOC Ltd (80883.HK) to the CMIC list.