China has ramped up its oversight of mainland companies holding data that seek a listing in Hong Kong with a proposed new law mandating a cybersecurity review.
According to the new draft regulation, published by China’s cyberspace regulator today, officials would impose a cybersecurity review on such companies if a listing is deemed to have a potential impact on the country’s national security.
But the draft rule does not specify how regulators will judge this to be the case.
Thus far, China has concentrated its regulatory scrutiny on a string of rules aimed at Chinese tech giants seeking to list in other countries. Currently, a similar law applies to companies that hold the data of more than 1m users, before they go public on a foreign stock exchange.
This has hampered several Chinese tech companies’ plans to IPO abroad and has seen TikTok owner ByteDance swap its much-anticipated overseas listing in favour of Hong Kong, where it reportedly plans to go public this quarter or early next year.
The new draft regulation is subject to change and is open for public consultation until 13 December. But if the new plan is pushed through, it will add a new layer of complication for Chinese high growth companies like ByteDance for whom a Hong Kong listing had begun to look like the more feasible option.
Under the proposed plans, internet platforms that accumulate a large amount of “important data” relevant to China’s economy, key sectors like telecoms, finance and energy, and the country’s security, must also undergo a cybsersecurity review before any merger, acquisition or restructuring that are could have a potential impact on national security, the cyberspace regulator said today.
For all the latest Lifestyle News Click Here
For the latest news and updates, follow us on Google News.
