The world’s largest stock exchange has reversed its decision to ban three Chinese telecoms companies after a Presidential order was issued late last year.
The New York Stock Exchange (NYSE) had issued its original decision to delist the firms on December 31 following President Trump’s executive order the month previously.
In it, Trump claimed that ostensibly civilian businesses in China are actually part of a giant military-industrial complex, and that by listing on US exchanges they are effectively raising funds from unwitting investors in order to modernize China’s military.
“Through the national strategy of military-civil fusion, the PRC increases the size of the country’s military-industrial complex by compelling civilian Chinese companies to support its military and intelligence activities,” it said.
“Those companies, though remaining ostensibly private and civilian, directly support the PRC’s military, intelligence and security apparatuses and aid in their development and modernization.”
However, in a brief statement on Monday, the NYSE said it had reconsidered its decision regarding China Telecom, China Mobile and China Unicom.
“In light of further consultation with relevant regulatory authorities in connection with Office of Foreign Assets Control FAQ 857 … the New York Stock Exchange LLC announced today that NYSE Regulation no longer intends to move forward with the delisting action in relation to the three issuers enumerated below which was announced on December 31 2020,” it stated.
A link in the statement takes readers to a US Treasury FAQ page.
The move follows a tersely worded statement from the China Securities Regulatory Commission over the weekend, which claimed that the US continues to “groundlessly suppress foreign companies listed on the US markets.”
Last month, a new law passed Congress which will force Chinese firms to comply with Public Company Accounting Oversight Board’s (PCAOB) audits or be delisted. Companies from many other nations do this in line with SEC rules to provide maximum transparency to investors, although China has resisted for over a decade.
The NYSE ended its brief statement by admitting that it will continue to assess the applicability of the executive order to the Chinese telcos and their listing status.