SINGAPORE – China plans to propose new rules banning companies with a large amount of sensitive consumer data from being made public in the United States, according to people familiar with the issue, a move that is likely to frustrate the ambitions of technology companies. country of listing abroad. .
In recent weeks, Chinese securities regulator officials have informed some international companies and investors that the new rules would prohibit Internet companies that have a large amount of user-related data from trading abroad, according to the people. Regulators said the rules are aimed at companies seeking foreign initial public offerings through units incorporated outside the country, according to people.
China Securities Regulatory Commission officials said companies with less sensitive data, such as those in the pharmaceutical industry, will still likely receive Chinese regulatory approval for foreign listings, according to people.
The new rules are likely to help Beijing exercise more control over the complex corporate structure used by China’s largest technology companies to circumvent restrictions on foreign investment. Chinese leaders consider sectors such as the Internet, telecommunications and education to be sensitive due to political or national security concerns.
Chinese technology giants, including Alibaba Group Holding Ltd., Didi Global Inc. and Tencent Holdings Ltd., have used this corporate structure known as a Variable Interest Entity to attract foreign capital and trade outside the international arena.