Cybersecurity Review Revised to Address Data Security of Overseas Listings

July 16, 2021 | BY

Vincent Chow

PRC companies wanting to list outside China face extended cybersecurity reviews and potentially burdensome documentation submission requirements

Summary

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  • Revised draft cybersecurity review measures explicitly targets listings outside China
  • Significant extension of review timeline and increased documentation submission
  • Specific wording suggests Hong Kong listings not subject to new requirements 

China has swiftly followed up on its cybersecurity probes into three Chinese tech companies that recently went public in the United States with revisions to its year-old cybersecurity review regime to explicitly cover listings outside China. The move is the latest example of increasing cybersecurity focus in the area of PRC financial regulation.

On July 10, the Cyberspace Administration of China (CAC) promulgated the Cybersecurity Review Measures (Revised Draft for Comments) (网络安全审查办法(修订草案征求意见稿)), open for feedback until July 25. The revised draft expands the scope and purpose of the Cybersecurity Review Measures, in effect since June 2020, which mainly scrutinizes the national security risks of the procurement of network products or services by PRC critical information infrastructure (CII) operators.

The revised draft expands the national security concerns of cybersecurity reviews from just CII operator procurement to data processing and overseas listings (Article 10). In particular, it requires all PRC companies that process the personal information of more than 1 million users file for a cybersecurity review with the CAC's Cybersecurity Review Office (CRO) before they can list outside China (Article 6).

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