• The long-awaited executive order from the Biden Administration on America’s investment in Chinese companies has paved the way for plenty of questions over its implementation.

• “Its 45-day public comment period gives U.S. investors significant potential to influence any final regulation,” analysts added.

• The industry, along with the political developments, has marked a shift in the general risk management. 

The long awaited executive order from the Biden Administration on America’s investment in Chinese companies has paved the way for plenty of questions over its implementation.

“Its 45-day public comment period gives U.S. investors significant potential to influence any final regulation,” analysts added.

“The executive order obviously gives an outline of what the program’s scope is going to be like,” – Brian P. Curran, Partner at Hogan Lovells, Washington DC.

“It’s not even a proposed rule. It’s not a final rule.”

President Joe Biden had signed the executive order on Wednesday, which aimed at restricting the American investments in Chinese semiconductor, artificial intelligence, and quantum computing companies over the concerns of national security.

The Treasury Secretary Janet Yellen has taken up the most responsibility for dictating the details. Her department has given out a fact sheet and an elaborate “Advance Notice of Proposed Rulemaking,” which has specific questions that require more information.

What Is Banned?

However, the announcement does not completely ban American Investments; however, the US transactions possibly cover certain areas:

• Greenfield investment
• Certain debt financing transactions
• Joint ventures
• Acquisition of the equity interests through acquisitions and mergers, venture capital, and private equity.

What Is Allowed?

The under-listed transactions are not included in the upcoming regulation:

• Debt rating
• Underwriting
• University research collaborations
• Intellectual property licensing
• Bank lending and payment processing
• Contracts for buying raw materials
• Global Custody
• Prime Brokerage
• Stock research

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