Daily Management Review

SEC blocks the sale of the Chicago Stock Exchange


The Securities and Exchange Commission (SEC) blocked a deal to sell the Chicago Stock Exchange (CHX) to a group led by Chinese investors, Reuters reports.

The regulator said that there are unresolved questions about the ownership structure within the framework of such a transaction. Besides, it is not clear whether the SEC will retain sufficient control over the exchange if it is sold.

"In connection with these concerns, whether they were considered individually or in combination, we cannot conclude that CHX has proved that the proposed amendment of the rules is consistent with the law on exchanges and the applicable rules and by-laws. Therefore, we reject the proposed change in the rules," - the SEC said in a statement.

The decision of the SEC put an end to the two-year battle for obtaining permission for the deal.

The bid was made in February 2016. The deal was valued at $ 25 million. The Chinese Chongqing Casin Enterprise Group, a private company that invests in real estate development and financial assets, led the consortium of investors.

The sale of CHX was approved in December 2016 by the Committee on Foreign Investment in the United States (CFIUS), which carefully examines the transaction in terms of potential problems for national security. The deal also needed SEC approval.

In August last year, the commission postponed the decision to sell for further consideration.

Earlier, information about the sale of one of the oldest in the US sites for trading in securities caused a flurry of criticism from US congressmen. Many of them expressed extreme concern over the growing influence of China on the US economy.

Casin through CHX denied any connection with the Chinese government. The company said that it sees the potential of CHX and that its long-term goal was the listing of Chinese companies on the stock exchange in the US. Casin also planned to ultimately build a stock exchange in China using CHX technologies.

If the deal were approved, this would be the first time that Chinese investors directly owned the US stock exchange.

The Chicago Stock Exchange was founded in 1882. It accounts for only 0.5% of the daily trading volume in the US.

source: reuters.com

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