ANNOUNCEMENT | PRESIDENTIAL ORDER – CHINESE COMPANIES – FIXED INCOME SECURITIES | 15th February 2021
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 12 November 2020 (the “ORDER”).
Solactive AG has determined that the ORDER will have significant impact on the investment process of global investors (both, U.S. investors and non-U.S. investors) with regard to the investability of fixed income securities (the “AFFECTED SECURITIES”) issued by entities affected by the ORDER (the “AFFECTED ENTITIES”).
Accordingly, Solactive AG has decided to remove the AFFECTED SECURITIES listed in the table below from the corresponding impacted Solactive Indices with the next rebalance effective as of (open) 1 March 2021.
List of AFFECTED SECURITIES and corresponding impacted Solactive Indices:
| Affected Securities | Impacted Solactive Indices | |||
| Name | ISIN | Index Name | Index Ric | Index ISIN |
| China Three Gorges Corp | CND10001PSZ4 | Solactive Green Bond Index | .SOLGREEN | DE000SLA0FS4 |
| China Three Gorges Corp | CND10001TP30 | Solactive Green Bond Index | .SOLGREEN | DE000SLA0FS4 |
| Semiconductor Manufacturing International Corp | XS2101828452 | Solactive USD China Corporate High Yield Bond Index | .SOLCNHYC | DE000SL4AU3 |
The list of AFFECTED SECURITIES only includes fixed income securities issued by AFFECTED ENTITIES explicitly named in the ORDER or the lists published by the Department of Defense or the Office of Foreign Assets Control (OFAC) in accordance with the ORDER, but not fixed income securities issued by subsidiaries or affiliated companies of the AFFECTED ENTITIES.
The list of AFFECTED SECURITIES may be subject to future change following a communication released by the Office of Foreign Assets Control (OFAC) or any other relevant U.S. authority. Any updates to the list of AFFECTED SECURITIES will be separately announced with details of the treatment in Solactive Indices. Solactive AG will continue to monitor for any updates to the list of entities named in the ORDER, further clarifications on the scope of the ORDER as it pertains to affiliates, and any other relevant matter.
In addition, all AFFECTED SECURITIES, outstanding fixed income securities issued by an AFFECTED ENTITIES as well as any fixed income securities issued in the future by an AFFECTED ENTITIES will be generally excluded from the index universe or starting universe, respectively, of all Solactive Indices and will not be eligible in any index selection.