US blocks Chicago bourse sale to Chinese investors
new york — US regulators on Thursday killed the politically sensitive sale of the Chicago Stock Exchange (CHX) to a group led by China-based investors, saying a lack of information on the wouldbe buyers threatened the ability to properly monitor the exchange after the deal.
The move by the Securities and Exchange Commission (SEC) ends a two-year battle to gain approval for the sale and underscores the more hostile environment facing Chinese buyers under the administration of US President Donald Trump.
Trump brought the CHX deal up twice during the election campaign as an example of how jobs and wealth were leaving the United States.
SEC staff initially approved the sale of the privately owned exchange 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. US lawmakers from both parties had harshly criticised the deal in joint letters to the SEC, arguing that it would give the Chinese government access to American financial markets and questioning 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 recognises 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 on Thursday.
“We must continue to be vigilant, with thorough oversight, to prevent the highly-coordinated and strategic efforts of the Communist Chinese government to threaten our national security through malicious business investments.”
CHX is a niche player in the industry, handling just 0.5 per cent of US equities trades.
The acquisition, which was proposed in February 2016 and worth around $25 million, was led by Chongqing Casin Enterprise Group, a privately held company that invests in real estate development and financial holdings.