US regulators have blocked the politically sensitive sale of the Chicago Stock Exchange (CHX) to a group led by China-based investors.
The Securities and Exchange Commission (SEC), insists a lack of information on the would-be buyers threatened the ability to properly monitor the exchange after the deal.
The SEC’s decision ends a two-year battle to gain approval for the sale in what has been a hostile environment for Chinese buyers with US President Donald Trump making no secret of his views on the proposed sale.
As Reuters reports, Trump brought the CHX deal up twice during the election campaign as an example of how jobs and wealth were leaving the US.
The SEC had initially approved the sale of the privately- owned exchange in August, but almost immediately after being given the green light, SEC commissioners, led by Chairman Jay Clayton, a Trump appointee, put the decision on hold for further review.
Hard to regulate
The deal came under heavy criticism from both Republicans and Democrats as it was felt it would give the Chinese government access to US financial markets and questioning the SEC’s ability to regulate and monitor foreign owners.
CHX is a niche player in the industry, handling just a small percentage of US equity trades.
The proposed acquisition, worth around $25m, was led by Chongqing Casin Enterprise Group, a private company that invests in property development and financial assets.
The SEC block on the sale puts CHX’s future in doubt. The exchange insists it needs the infusion of capital to invest in its operations and attract business.