China puts companies on cybersecurity test in front of foreign IPOs | Modern

Cyberspace Administration of China will apply new rules to companies that hold data for more than 1 million users.

China’s cyberpace regulator said it has enacted new rules starting February 15 requiring platform companies with data for more than one million users to review security before registering their shares abroad.

The Cyberspace Administration of China (CAC) also said Tuesday that such companies should register to review cybersecurity before sending application lists to foreign security officials, according to a post on his WeChat account.

Companies will not be allowed to register in other countries if the review considers that national security could be compromised, it said.

This was a recent move a number of recent changes that the Chinese government has ordered to tighten maritime regulatory frameworks.

Hong Kong stocks have weakened on CAC issues. The Hang Seng Index fell 0.36 percent on Tuesday trading, and the city’s technical loss was 1.32 percent.

Shares at Hong Kong Exchanges and Clearing Ltd, which operate the Hong Kong stock exchange, fell 1.8 percent, down 2.4 percent following the announcement.

Strong restrictions

The CAC issued the rules in July for the first time, stating that security monitoring will focus on the risk of data being compromised, processed or used by foreign governments after external lists.

New rules regarding the use of technical algorithm control will be re-enacted from March 1, CAC said in a statement.

Those laws, which was first released in August last year, will require companies to grant users the right to turn off the service and will strengthen the control of journalists who use technology.

China’s cyberpace regulators are imposing stricter restrictions on data collection and storage. Officials are also pushing for companies to register in their country.

Two other new laws, the Data Protection Act and the Personal Information Protection Law, which deal with data retention and confidential data respectively, came into effect last year.