On Tuesday, China’s cyber security regulator said it will lay down certain rules for the platform companies who are seeking overseas listings.
The Cyberspace Administration of China (CAC) said that the new rules will be implemented from February 15, 2022, for the platform companies with data for more than 1 million users. Such companies will be required to undergo a security review before listing their shares overseas.
Therefore, companies are required to apply for cybersecurity reviews before applying for listing overseas. Companies that will be found by the cybersecurity reviews to affect the national security will not be allowed to list abroad, as said in a statement on the official WeChat account.
Adding on to this, certain rules regarding the use of algorithm recommendation technology will also be implemented from March 1. Earlier, both the rules were proposed last year. The cybersecurity rule was proposed by CAC in July last year saying it would focus on the risk of data being controlled by foreign companies after overseas listing.
Whereas, the use of algorithm recommendation technology was proposed in August last year. The rules are expected to impact many large companies including TikTok owner ByteDance and e-commerce Alibaba Group.