US regulators nix China-led bid for Chicago Stock Exchange
16 February 2018
US regulators yesterday struck down the proposal for the politically sensitive sale of the Chicago Stock Exchange to a group led by China-based investors, on the plea of a lack of information on the would-be buyers jeopardised the ability to properly monitor the exchange following the deal.
The move by the Securities and Exchange Commission (SEC) brings the curtain down on a two-year battle for approval of the sale and points to the more hostile environment faced by Chinese buyers under the administration of US president Donald Trump.
Trump had cited the CHX deal twice during the election campaign as an example of how jobs and wealth were leaving the US.
The privatel-owned exchange was initially approved by SEC staff in August, but within minutes of the announcement, SEC commissioners, led by chairman Jay Clayton, a Trump appointee, put the decision on hold for further review.
In joint letter to the SEC US lawmakers had severely criticised the deal, arguing that it would give the Chinese government access to US financial markets and questioned the SEC's ability to regulate and monitor foreign owners.
''This has been a long fight, and I am grateful we now have a President who recognizes the national security threats of allowing a Chinese government-affiliated company to own the Chicago Stock Exchange,'' Republican Congressman Robert Pittenger said in a statement yesterday.
The proposal would have seen the Chinese-led North America Casin Holdings group acquire a minority share of the privately owned Chicago Stock Exchange.
According to the exchange, which handles only 0.5 per cent of US stock trades, the deal would have provided the exchange with "vital capital".
The funding would have been used "to boost numerous initiatives designed to benefit the city of Chicago, the US economy and market structure as a whole"