China Widens Clampdown on Overseas Listings With Pre-IPO Review of Firms With Large User Data

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FILE PHOTO: A man walks past the New York Stock Exchange on the corner of Wall and Broad streets in New York City, New York, U.S., March 13, 2020. REUTERS/Lucas Jackson/File Photo

SHANGHAI ⸺ China’s cyberspace regulator said on Saturday any company with data for more than 1 million users must undergo a security review before listing its shares overseas, broadening a clampdown on its large “platform economy”. 

The security review will put a focus on risks of data being affected, controlled or manipulated by foreign governments after overseas listings, said the Cyberspace Administration of China.

China’s cyberspace regulators are imposing tighter restrictions on data collection and data storage, while authorities more broadly are pushing for companies to list domestically.

Saturday’s announcement will also require firms to submit the IPO materials they plan to file for review. The CAC is seeking public opinion on the rules.

The notice comes after Chinese authorities launched a probe of ride-hailing giant Didi Global Inc for allegedly violating user privacy, just days after its listing in New York.

Didi’s shares plunged 20% on news of the probe, and the company said its revenue would be affected.

Reporting by Josh Horwitz; Editing by Tom Hogue and William Mallard; Reuters

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