Hong Kong listings for Weibo, SenseTime, NetEase's music app seen as test case for China's new cybersecurity rules

Asia's Tech News Daily

a secondary listing in Hong Kong, received approval

The upcoming Hong Kong listings of three Chinese tech firms are being viewed as a test case for new mainland regulations that require certain initial public offering applicants to pass a cybersecurity review before going public in the city, with the outcome providing some clarity for Chinese companies mulling a flotation on one of Asia’s largest stock exchanges.

Microblogging platform Weibo, often dubbed China’s Twitter, is hoping to raise up to US$547.3 million in a secondary listing in Hong Kong expected on December 8, while NetEase’s music streaming service Cloud Village is aiming to raise US$421 million when its shares debut on Thursday. Meanwhile, artificial intelligence company SenseTime is said to have received approval from the Hong Kong stock exchange to proceed with a US$2 billion offering later this month.

These deals come amid Beijing’s intensified scrutiny of tech companies and their data security practices, in particular the transfer of data outside mainland China, which the government deems a matter of national security.

In July, soon after Chinese ride-hailing giant Didi Chuxing went public in New York, the Cyberspace Administration of China (CAC) launched a cybersecurity review into the company and proposed a mandate for all Chinese firms with more than a million users to get approval before listing in foreign markets.

While some people had assumed that IPOs in Hong Kong would be exempt from that requirement, draft rules released by the CAC last month clarified that listings in the special administrative region would also need to go through a cybersecurity review if they “affect or may affect national security”.

The regulations, which have yet to be officially enacted, have created ambiguities for companies looking to float in Hong Kong.

“The mood at the moment, given how new the laws are and the fact that we are still waiting for an explanation on the ambit and meaning of some of their provisions, is one of concerned uncertainty,” said Paul Haswell, partner at international law firm Pinsent Masons in Hong Kong.

Businesses have yet to find out, for instance, what would qualify them as so-called information infrastructure operators, which are required under the new rules to go through a cybersecurity review when procuring products and services. Companies also do not know whether their Hong Kong listing would be considered a matter of national security.

In draft listing documents submitted to the Hong Kong stock exchange on November 17, Weibo noted that “there have been no clarifications from the authorities as of the date of this document as to the standards for determining such activities that ‘affect or may affect national security’”.

The proposed rules may have posed bigger uncertainties to companies going public in Hong Kong than Chinese regulators had intended, according to James Gong, partner at Bird & Bird law firm in Beijing.

“I think it looks like an error in lawmaking, because [regulators’] original intention was to be more lenient towards Hong Kong listings,” said Gong.

SenseTime said in its draft prospectus filed on November 22 that it had not applied for a cybersecurity review with the Chinese government because it was unclear whether it would fall under the proposed requirement. If the rules turn out to apply to the company, there would be uncertainty as to whether a clearance could be obtained in time or at all, said SenseTime.

NetEase said in its draft prospectus published on November 23 that while the company had not been subject to any investigations or cybersecurity reviews by the CAC, the company intends to seek guidance from the agency once the rules are effective.

China International Capital Corporation, the country’s first and largest investment bank, advised its clients in a note seen by the Post in November that Hong Kong listing candidates were not yet subject to the CAC’s proposed requirements because public consultation for the new rules is open until December 13.

Even so, Chinese companies hoping to avoid the additional compliance requirement by rushing ahead with an IPO still face risks, according to experts.

Bird & Bird’s Gong said that companies seeking to go public in Hong Kong should preemptively carry out a self-assessment of national security risks. Bankers who spoke to the Post also said that firms dealing of sensitive data, as well as internet platforms or tech companies with a sizeable business, should proactively reach out to the CAC about any offshore IPO plans.

Hong Kong IPO applicants are obliged to seek a legal opinion as to why they think their business will not be affected by any laws and regulations that are expected to become effective in the near term, said Edward Au, southern regional managing partner at Deloitte China in Hong Kong.

“An applicant must stand ready to explain to the Hong Kong stock exchange’s listing division if it views that its business will not be affected by the proposed rules,” said Au.

Even for companies that have already received the green light from the Hong Kong stock exchange to list their shares, mainland regulators could retroactively require them to clear cybersecurity reviews once the regulations have been finalised, according to several bankers who spoke to the Post.

In any case, Chinese companies which have large volumes of Chinese data may be subject to oversight even before the CAC rules are in force, said Pinsent Mason’s Haswell, pointing to last year’s abruptly cancelled Hong Kong listing of Ant Group, the fintech affiliate of Post owner Alibaba Group Holding.

“Remember that Ant Financial had its IPO suspended without the use of any of these new laws and regulations,” said Haswell, using the firm’s former name.

Internet Explorer Channel Network
Asia's Tech News Daily
News Related

OTHER NEWS

Get your small business connected with Aruba Instant On

As the pandemic moved workers out of the office to work wherever they were able to, the need to stay connected and online has never been more important. We’ve all ... Read more »

The Best Buy 4-day sale is ending soon - deals on TVs, laptops, AirPods and more

The Best Buy 4-day sale is happening right now with epic deals on 4K TVs, laptops, AirPods, kitchen appliances, tablets, and more. We’ve scoured through the sale to bring you ... Read more »

The Book of Boba Fett episode 4 recap: the weakest chapter so far

About this episode – Episode 4 (of 7), ‘Chapter 4: The Gathering Storm’ – Written by Jon Favreau – Directed by Kevin Tancharoen ★★ Spoilers for The Book of Boba ... Read more »

Christian Wakeford: Moment Labour MPs cheer after Tory MP defeats in protest at Boris Johnson leadership

This is the moment Christian Wakeford ‘crossed the floor’ in the House of Commons after defecting from the Tory party in protest at Boris Johnson’s leadership.Wakeford was cheered by Labour ... Read more »

Godiva just released chocolate diamonds—here's how to get the jewelry for Valentine's Day

— Recommendations are independently chosen by Reviewed’s editors. Purchases you make through our links may earn us a commission. When you think of the best Valentine’s Day gifts, chocolate and ... Read more »

Tech giants face online safety inquiry

Some of the world's biggest tech companies will have their say on proposed laws that would hold them accountable for online harassment and abuse on their platforms. The proposed laws ... Read more »

SpaceX Rocket Streaks Through Florida Sky

SpaceX launched 49 Starlink satellites from the Kennedy Space Center in Florida on January 18, the company said. This hyperlapse footage was published by the Port St Lucie Police Department. ... Read more »

Gmail is getting a new 'inbox zero' icon - but you'll probably never see it

For those of us who really dominate the email game, a new Gmail update has promised a reward in the form of an all-new congratulatory “inbox zero” icon. The refreshed ... Read more »

Make dinnertime easier with Home Chef meal kits—save $90 now

— Recommendations are independently chosen by Reviewed’s editors. Purchases you make through our links may earn us a commission. Looking to streamline dinnertime? Meal kit delivery services can take the ... Read more »

US' Xinjiang law puts Chinese businesses in crosshairs, forcing them to take sides in political maelstrom

Ever since US President Joe Biden signed the Uygur Forced Labour Prevention Act into law last month, the apparel industry in China’s manufacturing hub of Guangdong province has been engulfed ... Read more »

Saturday Kitchen star Matt Tebbutt undergoes emergency surgery: details

Matt Tebbutt hasn't had the best start to the year! The Saturday Kitchen star has revealed he had to undergo emergency surgery this week, sharing an update from his hospital ... Read more »

How to watch Ivory Coast vs Algeria: live stream AFCON online from anywhere

Read more »

EXPLAINER: Microsoft's Activision buy could shake up gaming

Microsoft stunned the gaming industry when it announced this week it would buy game publisher Activision Blizzard for $68.7 billion, a deal that would immediately make it a larger video-game ... Read more »

The new normal is now just the normal

We’ve been talking about the new normal for some time, but when will it just become the norm? I think it already has, and businesses need to start playing catch ... Read more »

Arsenal vs Liverpool live stream: how to watch the Carabao Cup semi-final online, second-leg

Something has got to give tomorrow night in the second leg semi-final of the Carabao Cup when Liverpool travel to North London to play Arsenal. After a 10-man Gunners scraped ... Read more »

Amazon's Lord of the Rings forges a title to rule us all

Amazon Studios has officially unveiled the title for its upcoming Lord of the Rings TV series – and, given its ties to Sauron, it sounds very ominous indeed. Revealed in ... Read more »

How Dune's production team brought the world of Arrakis to life

There’s a saying among Hollywood’s most revered directors that filmmaking shouldn’t be about serving the audience, but the filmmakers themselves. Denis Villeneuve’s Dune just so happens to do both. The ... Read more »

Sony stock drops $20 billion thanks to Microsoft/Activision Xbox deal

Stock in Sony plunged overnight by 13%, equating $20 billion lost in the company, in the wake of Microsoft’s announcement that it will be purchasing Activision Blizzard. According to Bloomberg ... Read more »

Activision Blizzard CEO reveals why it was the right time to do a deal with Microsoft

Activision Blizzard lawsuit Publisher Activision Blizzard, responsible for the game this article refers to, is currently embroiled in ongoing litigation in regards to claims reporting a workplace culture that allegedly ... Read more »

ProtonMail wants to stop you being tracked online via email

Privacy-oriented email provider ProtonMail has introduced a new feature that looks to prevent advertisers from tracking users reading their emails. The ‘enhanced tracking protection’ blocks tracking pixels commonly found in ... Read more »

HSN is hosting its annual Beauty Choice Awards—check out our beauty editor's top picks

— Recommendations are independently chosen by Reviewed’s editors. Purchases you make through our links may earn us a commission. HSN is home to tons of incredible products, from our favorite ... Read more »

Last chance - get up to $300 off Asus Zephyrus gaming laptop deals at Best Buy

Are you shopping for high-end gaming laptop deals? There are two excellent options at Best Buy right now that are worth checking out. Word of warning, however – they expire ... Read more »

Best green web hosting of 2022

Choosing the best web hosting company typically involves weighing up many factors, such as price, features, support, reputation and more. The environmental impact of a web host probably won’t rank ... Read more »

The inventor of the World Wide Web says his creation has been abused for too long

Sir Tim Berners-Lee, the inventor of the World Wide Web, has called for a stronger focus on addressing the imbalance of power on the web. Speaking to Fujitsu CTO Vivek ... Read more »

Brentford vs Manchester United live stream: how to watch Premier League from anywhere

Ralf Rangnick’s mission to get the Red Devils back on track could get a major boost this evening, with the interim boss knowing that a win in west London will ... Read more »

Madeleine McCann investigators find ‘shocking' new evidence about suspect

Madeleine McCann was three years old when she disappeared in 2007 (PA) A German TV channel has discovered “shocking” new evidence against a man suspected of kidnapping Madeleine McCann, reports ... Read more »

Man arrested and charged with murder after nine-year-old girl found dead in a barrel in Australia

Nine-year-old Charlise Mutten was found dead in a barrel near a river in Australia (Screengrab/ABC News Australia/YouTube ) The 31-year-old stepfather of nine-year-old girl Charlise Mutten has been arrested and ... Read more »

David Davis tells Boris Johnson ‘in the name of God, go' at chaotic PMQs

Tory grandee calls on Johnson to resign at PMQs featuring fierce exchanges between PM and Keir Starmer The Tory grandee David Davis told Boris Johnson: “In the name of God, ... Read more »

AMD's new Radeon PRO GPU is more sensible than sexy, but that's no bad thing

AMD has unveiled a new addition to its Radeon PRO W6000 GPU series that caters specifically to the needs of the typical knowledge worker. The new Radeon PRO W6400 sits ... Read more »

China drafts rules to give property developers more access to escrow funds to ease industry's cash crunch, sources say

China is drafting nationwide rules to make it easier for property developers to access funds from sales still held in escrow accounts in its latest move to ease a severe ... Read more »

US-China tech war: Shanghai showers the cash to woo semiconductor talent and support local chip development

The Shanghai municipal government is rolling out a slew of generous incentives to attract talent and firms along the semiconductor supply chain, as part of China’s drive to fast track ... Read more »

Microsoft acquires Activision Blizzard for $68.7 Billion: Talking Tech podcast

Hit play on the player above to hear the podcast and follow along with the transcript below. This transcript was automatically generated, and then edited for clarity in its current ... Read more »

Martine McCutcheon reveals secret behind her stunning figure – and fans are inspired

Martine McCutcheon has taken to Instagram to reveal the one activity that has helped her mentally and physically – walking. MORE: Martine McCutcheon reveals jaw-dropping hair transformation Sharing a picture ... Read more »

Man pretended to be lawyer, doctor and council official to control girlfriend's life

Carwyn Roberts attempted to control his partner by telling her a string of lies. (North Wales Police) A controlling boyfriend who posed as a doctor to convince his girlfriend that ... Read more »

Boris Johnson scraps Plan B COVID rules and mandatory face masks from next week

Boris Johnson has confirmed that Plan B COVID measures will end next week. (PA) Boris Johnson has announced an easing of England’s Plan B coronavirus restrictions amid a battle to ... Read more »

Jennifer Lopez wears risqué leather bra top in striking new photo – fans react

Jennifer Lopez has taken to social media with a striking new look. The singer shared two snapshots on Instagram with fans – and they were blown away by her appearance. ... Read more »

Hogwarts Legacy will release this year says Warner Bros. in spite of delay rumors

Despite claims to the contrary, Hogwarts Legacy, the Harry Potter action-RPG, is apparently still on track to release at some point in 2022. The official Warner Bros. Brazil Twitter account ... Read more »

Starbucks to widen online reach in China through new alliance with Meituan, ending coffeehouse chain's partnership with Alibaba-backed Ele.me

US coffeehouse chain Starbucks is gearing up to expand its online presence across China through a new alliance with on-demand local services giant Meituan, ending an exclusive partnership with Alibaba ... Read more »

Monopoly in jeopardy: The two US bills that have Big Tech worried

With increased scrutiny from regulators around the globe these days, legal departments at the world’s biggest tech companies are likely working overtime on a daily basis. This week, the focus ... Read more »

China's digital currency: e-CNY wallet nearly doubles user base in two months to 261 million ahead of Winter Olympics

China’s official digital yuan app, e-CNY, had 261 million unique users at the end of 2021, nearly twice what it had in October, even before it was released in app ... Read more »
On free-english-test.com you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic