Chinese companies that have the data of more than 1 million users will need to pass a security review before issuing shares on overseas stock exchanges, the country’s internet regulator said on Saturday, reported the Financial Times.
The announcement from the Cyberspace Administration of China came less than a week after the State Council, China’s cabinet, and the Chinese Communist party’s Central Committee said a new regulatory regime was needed to police overseas listings, which had previously escaped strict government oversight.
President Xi Jinping’s administration is most concerned about listings in the US. More than 30 Chinese companies raised a combined record $12.4 billion in New York share sales the first half of the year, according to data from Dealogic.
The CAC’s edict confirmed its status as a powerful entity under the emerging regulatory regime for Chinese overseas listings. The regulator will inform IPO applicants if they have passed its data security review within 60 business days, but the process may take twice as long if there are disagreements.