IHS Markit Consultation Result on the Implementation of the EO 13959 Sanctions in the EMIX Indices

1. IHS Markit’s Administration

IHS Markit Benchmark Administration Limited (IMBA UK) is the Index Administrator of the EMIX indices. IMBA UK administers these indices in accordance with the International Organisation of Securities Commissions Principles for Financial Benchmarks (the IOSCO Principles) and the UK Benchmarks Regulation (UK BMR).

2. Background

Pursuant to an Executive Order (Executive Order 13959; hereafter EO or EO 13959) signed by the President of the United States of America on Thursday, 12 November 2020, U.S. Persons are prohibited from transacting in securities of certain Chinese companies as listed in the EO. The EO came into force on 11 January 2021, with initially 31 companies explicitly impacted. EO 13959 has been subsequently amended by Executive Order 13974 on 13 January 2021. A total of 8 additional companies were added to the original 31 companies on 03 December 2020 and 08 January 2021.

More recently, on 03 June 2021 during the consultation period, OFAC published Executive Order 14032 (“EO 14032”) that amended the sanctions language from EO 13959 and EO 13974 and updated the list of companies subject to the sanctions. The update both removed and added companies to the sanction list. The divestment period ends one year after a company has been added to the list.

IMBA has updated its analysis of the companies listed in the EO and its amendments to understand which securities that are part of the EMIX indices may be subject to the sanctions. This analysis has likewise sought to identify the impact of the EO on international investors’ ability to hold or invest in these securities.

3. Consultation Result

Based on the latest sanctions list published by OFAC on 03 June 2021 and feedback provided by market participants during the initial consultation issued on 25 May 2021, starting with the June 2021 quarterly review securities issued by companies listed by the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury (DOT) are not eligible for EMIX World and EMIX (EMICS) indices. Going forward, changes to the list of companies maintained by OFAC and announced prior to the rebalancing determination date (e.g. the first Friday of March, June,

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September and December each year) will be reflected in the subsequent quarterly rebalancing of the indices.

Based on the sanctions list published by OFAC on 03 June 2021, IMBA UK has identified the following 31 securities that are currently constituents of either EMIX World or EMIX (EMICS) indices:

EMIX EMIX Security Ticker World (EMICS) Securities listed in the 20 May 2021 consultation China Communications Construction Ord Shs A 601800.SH X China Communications Constructions Group Ord Shs H 1800.HK X X China Mobile Ord Shs 0941.HK X X China Railway Construction Ord Shs A 601186.SH X China Railway Construction Ord Shs H 1186.HK X X China Spacesat Ord Shs A 600118.SH X China Telecom Ord Shs H 0728.HK X X China Unicom (Hong Kong) Ord Shs 0762.HK X X China United Network Communications Ord Shs A 600050.SH X CNOOC Ord Shs 0883.HK X X Hangzhou HikVision Digital Technology Ord Shs A 002415.ZK X Nanjing Panda Electronics Ord Shs 0553.HK X Nanjing Panda Electronics Ord Shs A 600775.SH X Semiconductor Manufacturing International Ord Shs 0981.HK X X Securities added from the 03 June 2021 sanctions list update Aerospace CH UAV Ord Shs A 002389.ZK X Avic Aviation High-Technology Ord Shs A 600862.SH X AVIC Heavy Machinery Ord Shs A 600765.SH X AVIC Jonhon Optronic Technology Ord Shs A 002179.ZK X Avic Shenyang Aircraft Ord Shs A 600760.SH X AVIC Xi'an Aircraft Industry Group Ord Shs A 000768.ZK X Changsha Jingjia Microelectronics Ord Shs A 300474.ZK X China Aerospace Times Electronics Ord Shs A 600879.SH X China Avionics Systems Ord Shs A 600372.SH X China Marine Information Electronics Ord Shs A 600764.SH X China Shipbuilding Industry Ord Shs A 601989.SH X CSSC Offshore & Marine Eng (Gp) Ord Shs H 0317.HK X X CSSC Offshore & Marine Engineering (Group) Company 600685.SH X Limited Ord Shs A Fu Jian Torch Electron Technology Ord Shs A 603678.SH X Guizhou Space Appliance Ord Shs A 002025.ZK X Inner Mongolia First Machinery Group Ord Shs A 600967.SH X Zhonghang Electronic Measuring Instruments Ord Shs A 300114.ZK X

These securities will be removed from the respective indices during the June 2021 rebalancing.

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The following securities, originally listed by IMBA UK on 20 May 2021, have been identified as no longer subject to the sanctions following the update on 03 June 2021. These securities continue to be eligible for the respective indices:

EMIX EMIX Security Ticker World (EMICS) CRRC Corp Ord Shs A 601766.SH X CRRC Ord Shs H 1766.HK X X Dawning Information Industry Ord Shs A 603019.SH X

For more information please contact: [email protected].

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