China to clampdown on overseas listings
Chinese firms with data on more than 1m users will face security checks before they can list on foreign stock exchanges, the country’s digital regulator said today.
The step comes just days after the Chinese government said that new steps were needed to keep track of overseas listings, which had gone unpoliced.
The security review will put a focus on risks of data being affected, controlled or manipulated by foreign governments after overseas listings, the Cyberspace Administration of China (CAC) said, posting the proposed rules on its website.
Xi Jinping’s government is concerned about listings in the US, where over 30 Chinese firms raised a record $12.4bn in the first half of this year, according to data from Dealogic.
Two new sets of rules, the Data Security Law and the Personal Information Protection Law, which cover data storage and data privacy respectively, are on track to go into effect this year.
Saturday’s announcement will also require firms to submit the IPO materials they plan to file for review.
The security review, according to the CAC, will consider national security risks as “risk of supply chain interruption due to political, diplomatic, trade and other factors,” and risk of key data “maliciously used by foreign governments after listing in foreign countries.”
The CAC is seeking public opinion on the proposed rules.
The notice comes after Chinese authorities opened an investigation into ride-hailing giant Didi Global for allegedly violating user privacy, just days after its listing in New York.
Shares in the firm tumbled 20 per cent on news of the probe, and the company said its revenue would be affected.
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