The Cyberspace Administration of China will implement new regulations that would require nearly all Chinese companies seeking to list overseas to undergo a data security review, confirming a Bloomberg report from last week that said the CAC was considering such a move. There will be a review and consultation period in which the CAC seeks feedback to its proposed rules, which cover companies that hold data on more than 1 million users. The CAC said it was concerned that such data and personal information could be “affected, controlled, and maliciously exploited by foreign governments,” it said in a statement.
The new rules will cover just about every company wanting to do an IPO in the US, analysts said, and regulators are also considering requiring Variable Interest Entities (VIEs) like Alibaba Group, which have already gone public, to seek approval for additional share offerings offshore, according to Bloomberg.
So far this year, 37 Chinese companies have listed in the US, surpassing last year’s count, and raised a combined $12.9 billion, according to Bloomberg.
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Read our analysis of what this means for Hong Kong.