Stranagor
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(Yicai Global) Jan. 5 -- China has issued new regulations to supervise Chinese platforms with over one million users seeking to go public overseas amid national security concerns.
Chinese platforms processing personal information of more than one million users will be subject to cybersecurity reviews before listing overseas, according to the latest amendment to the Cybersecurity Review Measures jointly issued by 13 Chinese national departments yesterday. The new rules will come into effect on Feb. 15.
According to the Measures, also key information infrastructure operators purchasing network products and services and network platform operators that need to process data shall be reviewed if they pose a threat to national security.
The 13 departments, which include the Cyberspace Administration of China, the National Development and Reform Commission, the Ministry of Industry and Information Technology, and the China Securities Regulatory Commission, will review products and services, data processing activities, and possible national security risks.
The Cybersecurity Review Office, a subordinate office under the CAC, will formulate relevant systems and regulations for cybersecurity review. It will accept application materials within 10 working days and the preliminary review, if needed, within 30 working days. In case of complications, the review may be extended by 15 working days.
It is still not clear whether a cybersecurity review will be required for listings in Hong Kong.
Listings in Hong Kong are probably not exempted from the cybersecurity review, Pang Ming, chief economist and chief strategy analyst at China Renaissance Securities Hong Kong, told Yicai Global. Regulatory authorities in Hong Kong and the listing department of the Hong Kong Stock Exchange may also ask companies to provide cybersecurity and data security review results.
Firms in the Chinese mainland that have strong industry leadership in market segments, limited sensitive data, non-yuan funds, and competitive core teams for foreign investors in the consumer, medical, health, and internet and information service industries still wish to go public overseas, especially in Hong Kong, under the new regulations for offshore listings and information security, Pang noted.
“Hong Kong is expected to remain the first choice for companies seeking to go public and for those aiming to return to China after being listed in the US,” Pang added.
