China’s cyber security review rules will take effect on February 15 and will require some companies to seek regulatory approval before listing overseas.
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Starting next month, China will require some companies with large amounts of user data to obtain regulatory approval before they can list overseas.
The cyber security review procedure was first proposed last year. As China continues to strengthen its oversight of the domestic technology sector, the increasingly powerful China Cyberspace Administration will implement it on February 15.
Internet platforms that hold personal information of more than 1 million users must apply to regulatory agencies for cybersecurity review before an overseas initial public offering (IPO).
CAC stated that these rules are aimed at companies that carry out data processing activities that may affect national security.
If the regulatory agency finds that the company’s data processing activities do not endanger national security, it can conduct an overseas listing.
In the past year, Beijing has issued a series of new regulations for the technology industry, hoping to control the power of national giants and eliminate anti-competitive behavior.
Data has always been the focus of government attention. Last year, China passed its first major data protection law.
Last year, the country also launched its first cyber security review to investigate the IPO of Didi, a ride-hailing giant, that went public in the US a few days after the company went public without first conducting a review, which aroused the ire of regulators. In December last year, Didi said it would delist from the New York Stock Exchange and instead aim to list in Hong Kong.
Due to increasingly strict regulations and uncertainty about the ability of Chinese companies to list overseas, Hong Kong has become a popular destination for IPOs of Chinese technology companies.
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