(Yicai Global) July 30 -- US citizens and companies will not be allowed to trade units of the Tracker Fund of Hong Kong, the city’s largest exchange-traded fund, after June 3 next year, according to its updated prospectus.

TraHK’s manager, State Street Global Advisors Asia, amended the prospectus yesterday, after issuing a warning in January, to comply with a executive order signed by former US President Donald Trump last November that prohibited US investment in Chinese businesses linked with China’s armed forces.

The ETF will not be offered or sold in the United States or to ‘US persons,’ including citizens, lawful permanent residents, entities organized under US laws or any jurisdiction within the US, whether they are inside or outside of the United States, a notice to unitholders posted on its website said.

If investors continue to hold units after June 3, 2022, US law may prevent them from disposing of or dealing in those units, it warned.

HSBC Wealth Business Services owns 32.66 percent of TraHK, followed by Citi Bank at 13.12 percent, according to the Hong Kong Stock Exchange’s website. Investors with US backgrounds include JP Morgan Chase Bank with 1.8 percent, Queensway Hongkong with 0.87 percent, and Morgan Stanley Hongkong Securities with 0.11 percent.

“The changes do not otherwise affect the operation and/or manner in which TraHK is being managed, there will be no change in the fee structure in managing TraHK and the changes will not result in any material change to the investment objective or overall risk profile of TraHK,” the notice added.

State Street Global Advisors Asia warned in January that TraHK, which tracks the Hang Seng Index, would resume investments in Chinese firms the US has sanctioned.

Editor: Tom Litting