Chinese Regulator Proposes Cybersecurity Assessment in Hong Kong IPOs

BEIJING (Reuters) — China’s cyberspace regulator on Sunday proposed requiring companies pursuing stock exchanges in Hong Kong to request cybersecurity inspections if they process data related to national security.

Major internet platforms that plan to set up headquarters, operations or research centers abroad must also file a report with regulators, China’s Cyberspace Administration said in the draft rules.

The document, published on the regulator’s WeChat account website, calls for public comment on internet platforms that formulate privacy policies or create amendment rules that could significantly affect users’ rights and interests.

Companies with more than 100 million daily active users should have changes reviewed by external agencies and approved by the government.

Companies offering instant messaging services must stop restricting users from accessing other internet platforms or transferring files to other internet platforms unless they have good cause, the regulator said.

The proposals, which can be judged by the public until December 13, come as Beijing tightens its oversight of its tech sector with rules on how to handle the vast amounts of data they manage, handle users and interact with rivals.

China, which recently passed laws on data security and protection of personal information, wants to establish governance rules for the use of algorithms by companies. It has also urged companies to end a long-used “walled gardens” practice that prevents rivals’ links and services from being shared on their platforms.

The agency suggested in July that companies with data for more than 1 million users must undergo a security assessment before offering shares abroad, just days after the suspension of ride-hailing giant Didi Chuxing’s initial public offering over alleged data breaches. .