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Pedestrians pass by a China Mobile office in Beijing on Jan. 8, 2021.

Ng Han Guan/The Associated Press

Wall Street firms in Hong Kong including Goldman Sachs and JPMorgan have set out plans to reduce exposure to Chinese telecom companies named in a U.S. ban on investments in companies Washington considers linked to China’s military.

Parts of the ban were set to come into force later on Monday.

Goldman Sachs, JPMorgan and Morgan Stanley said in filings to the Stock Exchange of Hong Kong on Sunday evening that they will delist 500 Hong Kong-listed structured products that are linked to telecom companies China Mobile, China Telecom and China Unicom or are linked to local indexes including the Hang Seng Index – whose components include the telecom companies.

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In a separate statement, U.S. custodian bank State Street said an exchange-traded fund it manages which tracks the Hang Seng Index would not make any new investments in sanctioned stocks, though it would continue to maintain its existing shareholdings.

The statement said that according to information published by the U.S. Office of Foreign Assets Control (OFAC), the fund was no longer appropriate for U.S. individuals or companies to invest in.

The announcements follow statements last week by OFAC clarifying a November order from U.S. President Donald Trump that banned Americans from investing in Chinese companies that the U.S. considers to have links with China’s military.

The investment banks’ filings cited a piece of OFAC guidance saying the three telecom companies were specifically included in the initial executive order.

They also said the order would take effect for the structured products from 0930 EST (1430 GMT) on Monday, when Wall Street opens.

From Tuesday, there will be limited trading in the affected products with the investment banks only buying from investors and not selling, until Jan. 25 when all trading will be suspended. The products will be delisted on Jan. 28.

Bourse operator Hong Kong Exchanges and Clearing said it was “working closely with the relevant issuers to ensure orderly delisting, and facilitate buyback arrangements being arranged by the issuers.”

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There are over 12,000 structured products listed in Hong Kong issued by 15 companies.

Alex Wong, director at Ample Finance Group in Hong Kong, said the delistings would “not have too much impact”, as customers could switch to Europe or China based issuers.

Hong Kong’s markets watchdog, the Securities and Futures Commission, said it had stressed to the investment banks that “any action taken by them should be necessary, fair, and having regard to the best interest of investors and integrity of the market, and that investors should also be properly informed as appropriate.”

Hang Seng Indexes Co Ltd, Hong Kong’s main index provider, did not immediately respond to a request for comment.

Global index providers MSCI Inc, FTSE Russell and S&P Dow Jones Indices said last week they would cut the three Chinese telecom companies from benchmarks, wiping a combined $5.6 billion off the value of their Hong Kong-traded shares on Friday.

The New York Stock Exchange – after some flip-flopping – last week said it would delist the three firms’ U.S.-traded American Depositary Receipts on Monday.

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China’s foreign ministry has previously said it firmly opposes what it called U.S. abuse of its power to oppress Chinese companies.

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