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'China Plans to Exempt H.K. IPOs From Cybersecurity Reviews'

'China Plans to Exempt H.K. IPOs From Cybersecurity Reviews''China Plans to Exempt H.K. IPOs From Cybersecurity Reviews'
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BIG IDEA | ‘China plans to exempt companies going public in Hong Kong from first seeking the approval of the country’s cybersecurity regulator, removing one hurdle for businesses that list in the Asian financial hub instead of the U.S.’

‘China plans to exempt companies going public in Hong Kong from first seeking the approval of the country’s cybersecurity regulator, removing one hurdle for businesses that list in the Asian financial hub instead of the U.S., according to people familiar with the matter.’

  • ‘The Cyberspace Administration of China will vet companies to ensure they comply with local laws, but only those headed to other countries such as the U.S. will undergo a formal review, the people said.’
  • ‘All listings, including those in Hong Kong, will require a sign-off from the China Securities Regulatory Commission under the new framework, the people said.’

‘China’s government is overhauling the way it regulates initial public offerings as part of a broad campaign to tighten oversight of companies like Didi Global Inc. and ByteDance Ltd. that control reams of valuable user data.’

  • ‘Beijing has entwined the importance of data with that of national security and the battle for technological supremacy with the U.S., fueling speculation that regulators will use the new cybersecurity review to end the flood of Chinese companies going public in New York.’

‘The cybersecurity exemption for Hong Kong, which is a special administrative region of China, would help soften the blow for international banks like Morgan Stanley that have earned some $6.4 billion in fees from offshore listings by Chinese companies since 2014.’

  • ‘About 60% of that was generated from Hong Kong listings.’
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