China requires sure corporations to endure cybersecurity clearance earlier than going overseas

© Reuters. FILE PHOTO: A sign above an office of the Cyberspace Administration of China (CAC) is seen in Beijing, China, July 8, 2021. REUTERS / Thomas Peter

SHANGHAI (Reuters) – China's cyberspace regulator said Tuesday that it will roll out new rules starting February 15, requiring platform companies with data from more than 1 million users to undergo a security clearance before listing their stocks overseas .

The Cyberspace Administration of China () also said such firms should seek cybersecurity reviews before filing listing applications with overseas securities regulators, according to statements posted on their WeChat account.

Companies are not allowed to be listed abroad if the review reveals that national security could be compromised, according to a statement on their official WeChat account.

The CAC first proposed the rules in July – 10, according to which the security clearance will focus on the risk that data after foreign listings are influenced, controlled or manipulated by foreign governments.

Starting March 1, new rules for using algorithm recommendation technology will also be introduced, the CAC said in a separate statement.

These rules, which were first proposed in August last year, require companies to Users the right to switch off the service, and also tightened the supervision of news providers who use such technologies.

China's cyberspace regulators are imposing stricter restrictions on data collection and storage. The authorities are also generally pressing for companies to be listed domestically.

Two new sets of rules came into force last year, the Data Protection Act and the Act on the Protection of Personal Data, which cover data storage and data protection, respectively.

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