Chinese online platform operators with more than 1m users must apply for cybersecurity checks before they go public abroad, according to a new amendment published by 13 government ministries, as reported by Global Times on January 4. The Ministry of Industry and Information Technology (MIIT) will assign its affiliated China Cyberspace Review Technology and Certification Center to undertake the reviews. In addition, the China Securities Regulatory Commission (CSRC) will also participate in the examination as a member department. Notably, online platforms to list in Hong Kong would be exempted from the cybersecurity review.

The amendment follows a draft cybersecurity review regulation proposed by the Cyberspace Administration of China (CAC) in July 2021. The draft rule responded to events following the initial public offering (IPO) of China’s largest online ride-hailing platform Didi on the New York Stock Exchange (NYSE) in June 2021, in which Chinese regulators ordered Didi to remove its services from app stores due to concerns about the company’s data security issues. Amid tightening regulatory pressure, Didi began delisting from NYSE on December 3, 2021. People familiar with the matter revealed the company is seeking to go public in Hong Kong. As domestic measures on data security supervision develop, other Chinese enterprises looking to list abroad have also suspended overseas IPO plans temporarily, including China’s medical data firm LinkDoc Technology, and digital fitness platform Keep.

Sources:

https://www.globaltimes.cn/page/202201/1244030.shtml

https://www.scmp.com/tech/policy/article/3162050/china-exempts-hong-kong-listings-cybersecurity-review-regulators

https://www.scmp.com/tech/big-tech/article/3140611/beijing-tightens-grip-china-tech-proposal-cybersecurity-reviews-all

https://www.reuters.com/technology/didi-global-start-work-delisting-new-york-pursue-ipo-hong-kong-2021-12-03/