BNY Mellon Investment Management and its investment firms intend to comply with a US government Executive Order (EO) of June 3, 2021 prohibiting transactions in certain securities and derivatives of select Chinese companies. BNY Mellon fund investors should be aware securities prohibited under the EO will be excluded for investment in the portfolios of our funds as required.
The EO amends and replaces the securities-focused sanctions against certain Chinese companies introduced by Executive Order 13959 on November 12, 2020.
Starting from 2 August, 2021, EO14032 prohibits US persons from transacting in the publicly traded securities (or any securities that are derivative of, or are designed to provide investment exposure to such securities) of certain Chinese companies. These are companies operating in the defense and related materiel sector or the surveillance technology sector of the People’s Republic of China. The EO also prohibits US persons from transacting in pooled vehicles, including exchange traded funds, which hold one or more prohibited securities.
As a global company established and headquartered in the US, BNY Mellon regards the EO prohibitions as applicable on an enterprise-wide basis. This means it applies to BNY Mellon Investment Management and each of its investment firms, regardless of where they are domiciled or headquartered.
BNY Mellon investment firms and BNY Mellon funds, as applicable, are currently taking appropriate steps to comply with the EO. An analysis across our fund ranges has been conducted to determine if any existing holdings might need to be divested under the EO. Where required, the funds will divest holdings in such securities within applicable compliance periods.
Please note portfolios of all of the sub-funds in our flagship UK and European fund umbrellas, BNY Mellon Investment Funds and BNY Mellon Global Funds, plc., that are managed by a BNY Mellon investment firm will adhere to these prohibitions.
As of 23 July, 2021 there were 59 sanctioned Chinese companies on the EO list, although it may be modified over time.
To the extent the list of sanctioned Chinese companies is expanded, we will preclude investment (and divest) in associated prohibited securities as required. The sanctioned Chinese companies can be found on the US Department of the Treasury’s website: https://www.treasury.gov/ofac/downloads/ccmc/nscmiclist.pdf