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UDN: China Plans to Require Companies Seeking U.S. IPO to Hand Over Data Control

United Daily News (UDN), one of the primary Taiwanese news groups, recently reported that the Mainland China regulatory authorities are considering mounting pressure on companies with a large volume of data. If companies want to go public in the United States, they must hand over data governance and supervision rights to a third-party. The Chinese regulatory authorities prefer the third-party information security companies to have a government background and to be responsible for managing and supervising the data owned by those companies that intend to conduct IPOs in the U.S. The method can effectively limit the IPO companies’ ability to transfer data to foreign countries. China worries that those companies may be forced to hand over some of their data to foreign institutions when listing overseas, which will undermine China’s national security. This plan is one of the several proposals being considered. In recent months, China has strengthened its control over domestic Internet platforms which caused a significant drop in the stock market and severely affected investor confidence.

Source: UDN, August 20, 2021