U.S. rejects Chinese stock exchange bid

A Chinese takeover of the Chicago Stock Exchange just got blocked

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

"What makes the SEC rejection so striking is that ... under then-President Barack Obama, the Committee on Foreign Investment in the United States, an interagency group that examines proposed acquisitions for potential security risks, approved the deal", Politico noted.

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

The privatel-owned exchange was initially approved by SEC staff 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.

The deal had drawn criticism from USA lawmakers who questioned the SEC's ability to regulate and monitor the foreign buyers if the deal was approved.

However, politicians in the country, including the president, believe that allowing a Chinese firm to invest in a U.S. exchange was a bad idea.

Under the proposal, the Chinese-led North America Casin Holdings group would have bought a minority share of the privately owned Chicago Stock Exchange.

The exchange, which handles less than 1% of daily United States stock trading, was hoping the sale could be a springboard to a brighter future, attracting new listings and investments from China.

The SEC said that during its review, it was unable to obtain all the information it needed from the Chinese-led group of investors, including details about how some of the entities involved in the deal were funded. "We therefore disapprove the proposed rule change", the SEC said in a statement.

CHX's other key initiative to boost its volumes centers around giving certain trading firms faster access if they agree to strict trading obligations aimed at making it easier for others to buy and sell stocks on the exchange. The regulator said this "raises significant doubts" that it would be able to monitor the exchange if the deal went through.

The acquisition had previously been cleared by a US panel that vets foreign deals for potential national security concerns.

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