Close

China revises Cybersecurity Review Measures, requiring security reviews for all overseas IPO

July 10, 2021 0:09 pm

The Cyberspace Administration of China (CAC) announces today a revision of the recently effective Measures for Cybersecurity Review. The revised Measures now add an article that explicitly requests companies to apply for a review with the cybersecurity review office before filing an IPO request in foreign stock markets.

Details

China Securities Regulatory Commission (CSRC) is added to the existing twelve Chinese government departments to promulgate the revised Measures (Article 4).

Data processor of critical information infrastructure is now obligated to take a security review. The effective Measures only worked for operators of critical information infrastructure who purchase new network products and services. (Article 2)

The newly revised Article 6 goes, "operators with personal information of more than one million users must file a cybersecurity review with the cybersecurity review office before going public abroad."

The review office will also take "the risk of core data, important data or large amounts of personal information being exported aboard," and "the risk of foreign listed company and critical information infrastructure and core data being influenced, controlled, or maliciously used by foreign governments" into consideration. (Article 10)

Context

The regulation on a cybersecurity review system took effect on June 1 to promote "an orderly, secure and open cyberspace and safeguard national security." 

Didi is the first company to take the examination just two days after the ride-hailing giant began trading on the New York Stock Exchange. All 26 ride-hailing apps of Didi were ordered to delist from China's app stores because it found "serious violations" of Cybersecurity Law.

Three more apps, including Boss Zhipin, Yunmanman, and Huochebang, all owned by companies that recently began trading in the US stock market, were under investigation by the cybersecurity review office last week.

On July 8, Chinese fitness app Keep, podcasting platform Ximalaya, medical solution provider LinkDoc reportedly canceled their US IPO plans after the Didi debacle.