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Mike Pompeo: Investment Ban to Cover ETFs, Index Funds, Subsidiaries of Firms Linked to Chinese Military

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State Secretary Mike Pompeo has announced that the Department of the Treasury (DoT) will prohibit U.S. companies and individuals from investing in index funds, exchange traded funds and subsidiaries of Chinese companies with ties to the Chinese military.

Pompeo said in a statement published Monday the move is in compliance with an executive order signed in Nov. 2020 and seeks to ensure that U.S. investments do not support the modernization and development of Chinese military, security and intelligence services.

“Beginning on January 11, 2021, U.S. investors will no longer be able to transact in publicly traded or private market debt or equity securities, or any securities that are derivative thereof, regardless of the percentage ownership of CCMCs, with full divestment required by November 11th, 2021,” Pompeo said in the release.

He said the order covers all transactions by all U.S. persons, including pension funds, individuals, institutional investors, university endowments, bond issuers, venture capital firms, banks, index firms, private equity firms and U.S. entities operating abroad.

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