United States regulators killed politically-sensitive-sale of Chicago Stock Exchange to China-based investors.
It said lack-of-information on the would-be-buyers threatened proper-monitor of the exchange after the deal, Media reports on Friday.
The move by the Securities and Exchange Commission (SEC) ends a two-year battle to gain approval for the sale and underscores the more hostile environment facing Chinese buyers under the administration of U.S. President Donald Trump.
Trump brought the CHX deal up twice during the election campaign as an example of how jobs and wealth were leaving the United States.
SEC staff initially approved the sale of the privately owned exchange 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.
U.S. lawmakers from both parties had harshly criticised the deal in joint letters to the SEC, arguing that it would give the Chinese government access to American financial markets and questioning the SEC’s ability to regulate and monitor foreign owners.
“This has been a long fight and I am grateful we now have a President who recognizes the national security threats of allowing a Chinese government-affiliated company to own the Chicago Stock Exchange,” Republican Congressman, Robert Pittenger, said.
“We must continue to be vigilant, with thorough oversight, to prevent the highly-coordinated and strategic efforts of the Communist Chinese government to threaten our national security through malicious business investments.”
CHX is a niche player in the industry, handing just 0.5 per cent of U.S. equities trades.
The acquisition, which was proposed in February 2016 and worth around 25 million dollars, was led by Chongqing Casin Enterprise Group, a privately held company that invests in real estate development and financial holdings.
Casin, through CHX, has denied any affiliation with the Chinese government and no connections have been shown.
CHX declined to comment on the final decision.
Casin had said it saw potential in CHX and that its long-term goal was to list Chinese companies in the United States on the bourse. It also planned to eventually build an exchange in China using CHX technology.
If the deal had been approved it would have marked the first time Chinese investors had been direct owners of a U.S. stock exchange, although not the first time a U.S. exchange had foreign owners.
Deutsche Boerse bought the U.S.-based International Securities Exchange for 2.8 billion dollars in 2007 before selling it to Nasdaq Inc for 1.1 billion dollars in 2016.
