China will ‘not own’ Chicago Stock Exchange

China Daily (Canada) - - ACROSS AMERICAS - By PAUL WELITZKIN in New York paulwelitzkin@chi­nadai­lyusa. com

The Chicago Stock Exchange Inc said Chi­nese in­ter­ests will con­trol 49.5 per­cent of the exchange if a pro­posed sale of the com­pany gains reg­u­la­tory ap­provals. that may raise na­tional se­cu­rity con­cerns.

News re­ports have sug­gested that the panel may be con­cerned over whether the Chi­nese govern­ment would have in­flu­ence over the exchange’s own­ers.

The CHX rep­re­sen­ta­tive said it ex­pects to hear from CFIUS by the end of the year. CHX man­age­ment would re­main in place fol­low­ing com­ple­tion of the deal.

Ac­cord­ing to the SEC fil­ing, the new own­ers would in­clude a Chi­nese com­pany, Chongqing Casin En­ter­prise Group Co, which would own 20 per­cent of the exchange’s par­ent com­pany.

The fil­ing said other pro­posed own­ers in­clude Chongqing Jin­tian In­dus­trial Co, Chongqing Long­shang Dec­o­ra­tion Co and Rap­tor Group, the fam­ily of­fice of for­mer hedge-fund man­ager Jim Pal­lotta, which also owns part of Ital­ian soc­cer team AS Roma.

US in­vestors, the fil­ing said, in­clude Jay Lu, a US cit­i­zen, as well as An­thony Sal­iba, a board mem­ber of CHX Hold­ings Inc.

The CHX hopes the ac­qui­si­tion will help it lure Chi­nese com­pa­nies look­ing to list in the United States. Law­mak­ers in­clud­ing US Rep Robert Pit­tenger, a Repub­li­can from North Carolina, have raised ques­tions about the deal.

The Wall Street Jour­nal re­ported that Pit­tenger said at a House Fi­nan­cial Ser­vices Com­mit­tee meet­ing ear­lier this month that he had met with SEC Com­mis­sioner Michael Pi­wowar about the sale of the Chicago Exchange.

Pi­wowar “ex­pressed some of the same con­cerns re­gard­ing the cor­rup­tion in­side Chi­nese firms, as well as their com­pla­cency and the lack of trans­parency within them,” Pit­tenger said ac­cord­ing to the Jour­nal.

Pit­tenger’s of­fice did not re­spond to a re­quest for com­ment for this story.

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