Chinese companies going public in Hong Kong exempt from cybersecurity review

Didi’s stubbornness to go public in New York at the end of June 2021, against China’s will, prompted the authorities to publish a new regulation, imposing a cybersecurity review before any IPO abroad for platforms with over one million users. The final version of the regulation, released on January 11, appears to exclude Hong Kong from the measure.

Hong Kong, the refuge

A real doubt exists on this question. In November, one of the Chinese Cyberspace Administration (CAC) regulatory projects, which is due to conduct the review, included “ data processing entities seeking to be listed in Hong Kong which will influence where might influence national security “.

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The version published on Tuesday seems rather to favor the notion ” one country, two systems More or less in effect when it comes to the Hong Kong, China relationship. According to a Chinese blog bringing together lawyers and cybersecurity experts mentioned by the Hong Kong media South China Morning Post, ” the policy is now clear; the document only proposed requirements for IPOs in foreign markets, not to mention Hong Kong “.

Good news for Chinese companies. The fear of a Didi spell is on everyone’s mind. The China Securities Regulatory Commission (CSRC), the securities regulator, has tried to reassure investors about the future of Chinese companies’ IPOs abroad, without much success. Also Hong Kong has established itself as a refuge.

Beijing’s regulatory procrastination around overseas IPOs has fueled a lot of investor fears. Obvious doubts in the observation of the prices of Chinese companies.

Finally a little regulatory stability in China?

The final version of the cybersecurity exam text was validated by the State Council of China and supported by 13 ministries including Industry and Information Technology and CAC. The administration oversees the procedure, which is itself conducted by the China Cybersecurity Review Technology and Certification Center is affiliated with the State Administration for Market Regulation (SAMR) antitrust authority.

Chinese companies with over a million users will now have more visibility into what to expect before they randomly land in New York. This could calm the stock market situation of companies, if of course, other texts do not come to be added …


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