On July 6, the General Office of the Central Committee of China’s Communist Party and the General Office of the State Council jointly issued the Opinions on Strictly Cracking Down on Illegal Securities-related Activity in Accordance with Law (the Opinions) to further strengthen regulatory supervision of securities related activities, including enforcement with respect to overseas listings of China Concepts Stock (CCS) by enhancing data security protection. CCS generally refers to companies which conduct overseas listings with assets and/or earnings primarily based or originating in China. The Opinions were issued amidst probes into several Chinese internet platform companies by several government departments, including in this instance the increasingly powerful Cyberspace Administration of China (CAC) regarding data security with its implications for national security as well as privacy concerns. Such concerns are in part responses to more insistent demands by overseas regulators, particularly in the US, for transparency by CCS companies, including access to audit working papers.

This alert focuses on (i) the current status of cybersecurity investigations into CCS companies recently listed in the US; (ii) the requirements under the Opinions to tighten data security on offshore securities listings; and (iii) compliance issues confronting CCS companies with respect to data security, cross-border data transfer and privacy protection.