SEC Blocks Chinese Takeover of Chicago Stock Exchange


The top regulator for US financial markets is barring a Chinese-led group of investors from buying the Chicago Stock Exchange.

The decision by the SEC has put an end to a two-year battle for an approval of the sale and emphasizes once again zero tolerance by Donald Trump' s administration toward Chinese buyers.

Trump had cited the CHX deal twice during the election campaign as an example of how jobs and wealth were leaving the US. The deal had been recommended for approval by the S.E.C. staff, but was delayed by the chairman, Jay Clayton, a Republican and a Trump appointee.

Lawmakers in the U.S from both sides harshly criticized the deal through joint letters sent to the SEC, saying that it would allow the government of China to have access to the financial markets of the US and questioned the ability of the SEC to monitor and regulate foreign owners.

The US Securities and Exchange Commission (SEC) has rejected a bid by a Chinese-linked consortium to acquire the Chicago Stock Exchange, amid widespread political opposition to the deal.

"The Commission's review of the information before it. leads us to conclude that Chicago Stock Exchange has not met its burden to demonstrate that the proposed rule change is consistent with the Exchange Act", the SEC report said.

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A spokesman for the Chicago Stock Exchange declined to comment. "Accordingly, it is not necessary for us to consider either the relevance of such foreign investment concerns to our statutory review of this proposed rule change or the merits of the concerns themselves".

The SEC's decision comes at a time of rising trade tension between China and the US.

In particular, the SEC said it was not satisfied that it would have full access to the exchange's books and records if the deal were to go through.

USA politicians, including President Trump, have said letting a Chinese firm invest in a U.S. exchange was a bad idea.

The Wall Street regulator on Thursday did not mention the China connection, but said it found several reasons why the deal did not meet laws governing the ownership of United States exchanges, which are stricter than usual ownership rules due to the role they play in the economy.

In a letter sent to the SEC chairman over the summer, 11 members of Congress said they had concerns about the "severe lack of transparency in China", which would make it hard for the committee for "prevent undue influence or control over a national securities exchange".