The New York Stock Exchange is reportedly reconsidering its decision to delist China Telecom Corporation Ltd., China Mobile Ltd. and China Unicom Ltd. after Treasury Secretary Steven Mnuchin, according to a report, reached out to NYSE president Stacey Cunningham on Tuesday to say that he disagrees with the exchange's decision to reverse course.
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The NYSE first announced that it "no longer intends to move forward with the delisting action" in a statement on Monday, citing “further consultation” with U.S. regulators.
The move came just days after the NYSE said it had begun the process on Thursday of delisting the securities of China's three largest telecommunications companies in response to an executive order by President Trump in November, which prohibits "any transaction in publicly traded securities, or any securities that are derivative of, or are designed to provide investment exposure to such securities, of any Communist Chinese military company."
A spokesperson for the NYSE, owned by parent Intercontinental Exchange, declined to comment. A representative for Mnuchin did not immediately return FOX Business' request for comment.
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The exchange planned to suspend trading of the stocks sometime between Jan. 7 and Jan. 11.
The stock exchange also noted in the delisting announcement that issuers had a "right to a review of this determination by a Committee of the Board of Directors of the Exchange" and that it would apply the decision upon completion of all applicable procedures, including "any appeal of the NYSE Regulation staff’s decision."
Three sources familiar with the matter told Bloomberg that the initial decision to delist China's three largest telecommunications companies was meant to comply with President Trump's order, but that the exchange decided to change course when it became unclear that the companies were actually banned. The sources added that if and when the exchange receives confirmation from the government about what’s prohibited, it will move forward.
The Treasury Department released an FAQ on its website Monday, offering clarification on the order hours before the exchange announced its decision not to delist the companies, which said the order "does not require U.S. persons, including U.S. funds and related market intermediaries and participants, to divest their holdings in publicly traded securities (and securities that are derivative of, or are designed to provide investment exposure to, such securities) of the Communist Chinese military companies identified."
One of the sources reportedly said that the Treasury may offer further clarification through the Office of Foreign Assets Control.
The Chinese have been highly critical of the move to delist the stocks, with the country's Securities Regulatory Commission arguing in a statement on Friday that the executive order is "based on political purposes" and has "entirely ignored the actual situations of relevant companies and the legitimate rights of the global investors, and severely damaged market rule and order."
A spokesperson for the Chinese Commerce Ministry added in a statement on Saturday that China "opposes the Americans from abusing national security by listing Chinese companies into the so-called ‘Communist China Military Companies’ list" and that it would take "the necessary countermeasures to resolutely safeguard the legitimate rights and interests of Chinese companies.”
In addition, the ministry's statement said that the actions would also “greatly weaken all parties’ confidence in the U.S. capital market.”
The ministry did not offer details on what the countermeasures might be.
China Telecom Corporation Ltd., China Mobile Ltd. and China Unicom Ltd. closed higher on Tuesday.
Under Trump, the U.S. has stepped up economic sanctions and travel bans against Chinese companies, government officials and Communist Party members, especially in Trump’s last few weeks in office.
In December, the U.S. announced plans to limit visas for members of the Chinese Communist Party and their family members to one month, instead of 10 years.
Chinese tech giant Huawei has been shut out of the U.S. market and the U.S. has lobbied other countries to follow suit, albeit with mixed results.
The Associated Press contributed to this report