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Deepti Sri · · 1 min readChina to ban local firms with large consumer data from listing in the US
“China plans to propose new rules that would ban companies with large amounts of sensitive consumer data from going public in the US, a move that is likely to thwart the ambitions of the country’s tech firms to list abroad,” The Wall Street Journal reported, citing people familiar with the matter.
Details:
- The fresh set of rules are reportedly aimed at Chinese companies looking to list themselves on foreign stock exchanges through units incorporated outside the country.
- China may also set up a cross-ministry committee in the coming months and require companies to obtain formal approval to launch initial public offerings overseas.
Dive deeper:
- In the past, Chinese tech giants including Alibaba, Tencent, and Didi have used the variable interest entity corporate structure, which has helped them with foreign listings.
- The development comes as China looks to revise the rules for firms that hail from the country but are listed abroad and is exerting control against the use of complex corporate structures to sidestep restrictions on foreign investment.
Editing by Collin Furtado and Jaclyn Tiu
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