China to require security review on certain firms seeking overseas IPO

China launches pre-overseas IPO security review on firms with large user data. /CFP

China launches pre-overseas IPO security review on firms with large user data. /CFP China will require online platform firms holding personal information of more than 1 million users to apply for cybersecurity review before seeking overseas listing from February 15, China’s cyberspace regulator said on Tuesday.   The security review puts a focus on the impacts or possible impacts of platforms’ data operation on state security, according to the review measures jointly launched on Tuesday by 13 departments including the Cyberspace Administration of China (CAC), China Securities Regulatory Commission (CSRC) and Ministry of State Security.

Data operation refers to the collection, storage, usage, processing, transferring, offering and disclosure of information, according to a separate statement on CAC’s website. The security review will consider a series of national risks, including risks of key information infrastructure being illegally controlled, interrupted or damaged, risk of supply chain interruption due to political, diplomatic, trade and other factors, and risk of key data maliciously used by foreign governments after listing in foreign markets.  The CAC proposed security review in July to seek public opinion.

Before the new rules were proposed, China launched a probe into ride-hailing giant Didi Global Inc. for allegedly violating user privacy, just days after its low-profile listing in New York. Read more: CSRC: New rules on overseas listings designed to plug loopholes

(With input from Xinhua) 

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