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FTSE Russell could delete more Chinese companies after U.S. bolsters executive order

SHANGHAI (Reuters) - Global index publisher FTSE Russell said it may delete more Chinese companies from its global benchmarks, after the Trump administration on Monday strengthened an executive order barring U.S. investment in Chinese firms with alleged military backing.

The U.S. Treasury Department on Monday published guidance clarifying that the executive order, released in November, would apply to investors in exchange-traded funds and index funds as well as subsidiaries of Chinese companies designated as owned or controlled by the Chinese military.

FTSE Russell, which has so far announced the exclusion of nine Chinese companies from its global indexes in response to the executive order, said in a statement late on Monday that it is reviewing the U.S. clarification and will make evaluation for “potential additional exclusions”.

FTSE Russell reiterated it will publish an announcement on Jan. 4, 2021, with any additional deletions being effective from the open on Jan. 7.

FTSE Russell has so far deleted from its global indexes eight U.S.-blacklisted Chinese companies, include Hangzhou Hikvision Digital Technology Co and China Railway Construction. It will remove Chinese chipmaker Semiconductor Manufacturing International Corp (SMIC) in January.

Rival index publishers S&P Dow Jones Indices and MSCI made similar moves following Donald Trump’s November executive order.

Reporting by Samuel Shen and Emily Chow; Editing by Michael Perry

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