New rules for high-tech companies listing abroad

China said yesterday it would implement new rules to boost oversight of how platform companies make plans to list abroad or use recommendation algorithms.

The Cyberspace Administration of China said from February 15 new rules will require platform companies with data for more than 1 million users undergo a security review before listing overseas.

The CAC also said it would implement new rules governing the use of algorithm recommendation technology from March 1, requiring companies to give users the right to switch off the service and increasing oversight of news providers that use such technology.

Both sets of rules were proposed last year and are expected to impact a large swathe of companies, such as TikTok owner ByteDance, e-commerce giant Alibaba Group and many smaller players.

The CAC did not specify whether the rules will apply to companies seeking listings in Hong Kong.

The rules published yesterday did not specify whether the planned changes would be retrospective.

The CAC first proposed the cybersecurity reviews in July, saying they would put a focus on the risks of data being affected, controlled or manipulated by foreign governments after overseas listings.

China's state planner said last week it would demand regulatory clearance for overseas Chinese listings in sensitive sectors such as internet news and publishing.

Separately, the China Securities Regulatory Commission said on December 24 it would require companies wishing to list overseas to submit filings to the agency first for registration, under a system that also involves close coordination among various regulatory bodies.