The top regulator for U.S. financial markets is barring a Chinese-led group of investors from buying the Chicago Stock Exchange.

In a notice late Thursday, the Securities and Exchange Commission highlighted various concerns, including whether the deal would allow it to supervise the exchange properly.

The SEC said that during its review, it was unable to obtain all the information it needed from the Chinese-led group of investors, including details about how some of the entities involved in the deal were funded. The regulator said this "raises significant doubts" that it would be able to monitor the exchange if the deal went through.

The deal was first announced in February 2016, and had been in regulatory limbo for two years.

The acquisition had previously been cleared by a U.S. panel that vets foreign deals for potential national security concerns. The Committee on Foreign Investment in the United States (CFIUS) said in December 2016 that there were "no unresolved national security concerns" related to the takeover.

Related: China clears key hurdle to buy Chicago Stock Exchange

The Chicago Stock Exchange, in a blog post Friday, said it was disappointed with the decision.

"By disapproving the transaction, the SEC has denied the American public an historic and unprecedented opportunity to build a mutually beneficial economic bridge between the world's largest economies, while unfairly disadvantaging our company and shareholders," the exchange said.

The exchange, founded in 1882, handles a very small portion of U.S. trading. But the takeover still came under fire from U.S. lawmakers, who worried about the national security implications.

In a letter sent to the SEC chairman over the summer, 11 members of Congress said they had concerns about the "severe lack of transparency in China," which would make it difficult for the committee for "prevent undue influence or control over a national securities exchange."

The Chongqing Casin Enterprise Group, which spearheaded the acquisition, is a holding company with interests in financial services, real estate and environmental protection.</s>The U.S. Securities and Exchange Commission on Thursday rejected the sale of the Chicago Stock Exchange (CHX) to a group led by China-based investors, saying there were unresolved questions about the ownership structure under such a deal and whether the SEC would have sufficient oversight of the exchange if it was sold.

REUTERS: The U.S. Securities and Exchange Commission on Thursday rejected the sale of the Chicago Stock Exchange (CHX) to a group led by China-based investors, saying there were unresolved questions about the ownership structure under such a deal and whether the SEC would have sufficient oversight of the exchange if it was sold.

"Because of these concerns, whether viewed independently or in combination, we are unable to find that CHX has met its burden of demonstrating that the proposed rule change is consistent with the Exchange Act and the applicable rules and regulations thereunder. We therefore disapprove the proposed rule change," the SEC said in a statement.

SEC staff had initially approved the sale of privately owned CHX for an undisclosed amount to a consortium led by Chongqing Casin Enterprise Group but the regulator put that decision on hold in August of last year for further review.

The deal had drawn criticism from U.S. lawmakers who questioned the SEC's ability to regulate and monitor the foreign buyers if the deal was approved.</s>The top regulator for U.S. financial markets is barring a Chinese-led group of investors from buying the Chicago Stock Exchange.

In a notice late Thursday, the Securities and Exchange Commission highlighted various concerns, including whether the deal would allow it to supervise the exchange properly.

The SEC said that during its review, it was unable to obtain all the information it needed from the Chinese-led group of investors, including details about how some of the entities involved in the deal were funded. The regulator said this "raises significant doubts" that it would be able to monitor the exchange if the deal went through.

The deal was first announced in February 2016, and had been in regulatory limbo for two years.

The acquisition had previously been cleared by a U.S. panel that vets foreign deals for potential national security concerns. The Committee on Foreign Investment in the United States (CFIUS) said in December 2016 that there were "no unresolved national security concerns" related to the takeover.

The Chicago Stock Exchange did not immediately respond to a request for comment Thursday.

The exchange, founded in 1882, handles a very small portion of U.S. trading. But the takeover still came under fire from U.S. lawmakers, who worried about the national security implications.

In a letter sent to the SEC chairman over the summer, 11 members of Congress said they had concerns about the "severe lack of transparency in China," which would make it difficult for the committee for "prevent undue influence or control over a national securities exchange."

The Chongqing Casin Enterprise Group, which spearheaded the acquisition, is a holding company with interests in financial services, real estate and environmental protection.</s>A federal securities regulator on Thursday struck down the proposed $20 million acquisition of a Chicago-based trading hub, the Chicago Stock Exchange, by a Chinese-owned company.

The Securities and Exchange Commission said it blocked the deal because of a lack of transparency in the details, including an inability to identify who exactly would control the exchange.

The proposed deal, in which a subsidiary of the Chongqing Casin Enterprise Group was to buy the exchange, drew sharp criticisms from Republican and Democratic lawmakers, who said it could put the security and stability of United States financial markets at risk.

President Trump has railed against the proposed acquisition. During a presidential debate in South Carolina in 2016 after the deal was announced, he said: “China bought the Chicago Stock Exchange — China, a Chinese company. They are taking our jobs. They are taking our wealth. They are taking our base.”

“This has been a long fight, and I am grateful that we have a president who recognizes the security threats from Chinese government-affiliated ownership of the Chicago Stock Exchange,” Representative Robert Pittenger, Republican of North Carolina, said in an emailed statement. “Recall, the Obama administration was misguided and fully endorsed this transaction.”</s>The U.S. Securities and Exchange Commission on Thursday rejected the sale of the Chicago Stock Exchange (CHX) to a group led by China-based investors, saying there were unresolved questions about the ownership structure under such a deal and whether the SEC would have sufficient oversight of the exchange if it was sold.

REUTERS: U.S. regulators on Thursday killed the politically sensitive sale of the Chicago Stock Exchange (CHX) to a group led by China-based investors, saying a lack of information on the would-be buyers threatened the ability to properly monitor the exchange after the deal.

The move by the Securities and Exchange Commission (SEC) ends a two-year battle to gain approval for the sale and underscores the more hostile environment facing Chinese buyers under the administration of U.S. President Donald Trump.

Trump brought the CHX deal up twice during the election campaign as an example of how jobs and wealth were leaving the United States.

SEC staff initially approved the sale of the privately owned exchange in August, but within minutes of the announcement SEC commissioners, led by Chairman Jay Clayton, a Trump appointee, put the decision on hold for further review.

U.S. lawmakers from both parties had harshly criticized the deal in joint letters to the SEC, arguing that it would give the Chinese government access to American financial markets and questioning the SEC's ability to regulate and monitor foreign owners.

"This has been a long fight, and I am grateful we now have a President who recognizes the national security threats of allowing a Chinese government-affiliated company to own the Chicago Stock Exchange," Republican Congressman Robert Pittenger said in a statement on Thursday.

"We must continue to be vigilant, with thorough oversight, to prevent the highly-coordinated and strategic efforts of the Communist Chinese government to threaten our national security through malicious business investments."

CHX is a niche player in the industry, handingly just 0.5 percent of U.S. equities trades.

The acquisition, which was proposed in February 2016 and worth around US$25 million, was led by Chongqing Casin Enterprise Group, a privately held company that invests in real estate development and financial holdings.

Casin, through CHX, has denied any affiliation with the Chinese government and no connections have been shown.

CHX declined to comment on Thursday on the final decision.

Casin had said it saw potential in CHX and that its long-term goal was to list Chinese companies in the United States on the bourse. It also planned to eventually build an exchange in China using CHX technology.

If the deal had been approved it would have marked the first time Chinese investors had been direct owners of a U.S. stock exchange, although not the first time a U.S. exchange had foreign owners. Deutsche Boerse bought the U.S.-based International Securities Exchange for US$2.8 billion in 2007, before selling it to Nasdaq Inc for US$1.1 billion in 2016.

The CHX deal was approved in December 2016 by the Committee on Foreign Investment in the United States, which scrutinizes deals for potential national security concerns, but also needed SEC approval.

The Wall Street regulator on Thursday did not mention the China connection, but said it found several reasons why the deal did not meet laws governing the ownership of U.S. exchanges, which are stricter than usual ownership rules due to the role they play in the economy.

Critically, the SEC said in a filing posted on its website that it was not satisfied about the source of funds for the deal and who the ultimate consortium owners would be, raising worries the structure of the deal could allow new, unknown entities to assume stakes over time.

The SEC, which conducted its own extensive due diligence when reviewing the case, said that the CHX was not able to provide key information it had requested, including access to the potential owners books, "leaving various questions unanswered."

The CHX's inability to verify the ultimate potential owners would also make it difficult for the bourse to satisfy its ongoing compliance monitoring obligations, and would obstruct the SEC's own capacity to oversee CHX, it said.

In particular, the SEC said it was not satisfied it would have full access to the exchange's books and records if the deal were to go through.

After a two-year delay, the SEC's decision puts CHX's future in doubt. The exchange said it needed the infusion of capital to invest in its operations and attract business.

CHX's other key initiative to boost its volumes centers around giving certain trading firms faster access if they agree to strict trading obligations aimed at making it easier for others to buy and sell stocks on the exchange.

SEC staff approved that plan in October, but the SEC commissioners also put that decision on hold and there is no deadline for a further ruling.

Technically, CHX could still resubmit its proposal or seek other buyers.

CHX competes against the New York Stock Exchange and its three affiliated exchanges, all owned by Intercontinental Exchange Inc, and Nasdaq Inc and Cboe Global Markets, both of which own four U.S. stock exchanges.</s>US rejects merger between Chicago Stock Exchange and Chinese investor group

The US has rejected a proposed merger between the Chicago Stock Exchange and a Chinese-linked investor group. The decision comes after more than two years of reviews by officials. The tie-up was initially approved by the Committee on Foreign Investment in the United States, pending further approval by the Securities and Exchange Commission (SEC).

But US politicians, including President Trump, have said letting a Chinese firm invest in a US exchange was a bad idea.

Under the proposal, the Chinese-led North America Casin Holdings group would have bought a minority share of the privately owned Chicago Stock Exchange.

 The exchange, which handles just 0.5% of US stock trades, had said the deal would have proved the exchange with vital capital.

That funding would have been used to boost numerouss initiatives designed to benefit the city of Chicago, the US economy and market structure as a whole.

While the investment got an initial vote of approval by SEC staff in August 2017, the commission ultimately ruled that the deal did not meet the rules that govern US stock exchanges.

The review process has also raised questions about whether the proposed ownership structure will allow the commission to exercise sufficient oversight of the exchange the SEC said on Thursday.

The SEC's decision follows several other moves by US officials to deter Chinese firms doing business in the US, or partnering up with US firms to sell their goods in the country.

In January, China's telecommunications giant Huawei said it had been unable to strike a deal to sell its new smartphones via a US carrier, widely reported to be AT&T. Also earlier this year, the US also blocked a US$ 1,2bn sale of money transfer firm Moneygram to China's Ant Financial, the digital payments arm of Alibaba.

It was the highest profile Chinese deal to be rejected by Washington since Donald Trump came to power. US politicians who had opposed the stock exchange deal said they applauded the decision.

This has been a long fight, and I'm grateful we now have a president who recognises the national security threats of allowing a Chinese government-affiliated company to own the Chicago Stock Exchange, Republican congressman Robert Pittenger said in a statement.</s>NEW YORK, Feb 16 (Reuters) - The Chicago Stock Exchange said on Friday it was evaluating its options after the U.S. Securities and Exchange Commission blocked the sale of the bourse to a group of U.S. and China-based investors due to the opaque nature of the buyers and their funds.

The SEC's decision brought to an end a two-year effort to sell the exchange, known as CHX, to a consortium of investors that was led by China's Chongqing Casin Enterprise Group and its U.S. affiliate North American Casin Holdings. (Reporting by John McCrank; Editing by Tom Brown)</s>WASHINGTON (dpa-AFX) - The U.S. Securities and Exchange Commission on Thursday blocked the proposed acquisition of the Chicago Stock Exchange by a Chinese-led group of investors.



The SEC said the proposed acquisition deal does not comply with U.S. rules governing stock exchanges. The regulator said the deal lacks transparency in the details, including an inability to identify who exactly would control the exchange.



A subsidiary of the Chongqing Casin Enterprise Group was to buy the Chicago Stock Exchange for $20 million.



'The inability of the Exchange to obtain documents and information necessary for it and the Commission to resolve key questions regarding the funding of, and relationships between, upstream investors-notwithstanding its strong incentive to do so in light of the pending Commission review of the proposed rule change- arises significant doubts about the Exchange's ability to engage in this extensive monitoring following approval of the Proposed Transaction,' SEC said in a statement.



'We therefore find that the Exchange has not provided a sufficient basis for us to conclude that it would be able to ensure compliance with the ownership and voting limitations following consummation of the Proposed Transaction'



Copyright RTT News/dpa-AFX</s>Feb 15 (Reuters) - The U.S. Securities and Exchange Commission on Thursday rejected the sale of the Chicago Stock Exchange (CHX) to a group led by China-based investors, saying there were unresolved questions about the ownership structure under such a deal and whether the SEC would have sufficient oversight of the exchange if it was sold.

“Because of these concerns, whether viewed independently or in combination, we are unable to find that CHX has met its burden of demonstrating that the proposed rule change is consistent with the Exchange Act and the applicable rules and regulations thereunder. We therefore disapprove the proposed rule change,” the SEC said in a statement.

SEC staff had initially approved the sale of privately owned CHX for an undisclosed amount to a consortium led by Chongqing Casin Enterprise Group but the regulator put that decision on hold in August of last year for further review.

The deal had drawn criticism from U.S. lawmakers who questioned the SEC’s ability to regulate and monitor the foreign buyers if the deal was approved.</s>U.S. regulators rejected a bid by a Chinese-linked consortium to take over the Chicago Stock Exchange, extinguishing an ambitious dream of starting an international listing venue from a minuscule market.

The Securities and Exchange Commission's decision ends a process that lasted two years and took place in the crucible of a presidential campaign and a new administration that's expressed skepticism over China's policy motives. Now that it's over, the exchange founded in 1882 is left handling less than 1 percent of daily U.S. stock trading, missing out on an audacious project to court smaller companies, particularly those based in China.

In a document posted on the SEC's website Thursday, the regulator said the deal didn't comply with U.S. rules governing stock exchanges. The SEC said it couldn't resolve concerns about the proposed ownership structure, which would've given 29 percent of the company to a China-based shareholder. The Chicago Stock Exchange couldn't supply documents the regulator requested about relationships among the proposed buyers, according to the SEC.

Will Ruben, a spokesman for the Chicago Stock Exchange, declined to comment.

Though the transaction was relatively small, it drew outsize attention because of the country of origin of the lead investor, Chongqing Casin Enterprise Group Co. SEC Chairman Jay Clayton, who joined the agency this year following a career as a deals lawyer, has publicly fretted that it's too hard for companies to go public in the U.S. The exchange had hoped to address that situation by selling itself, while also creating a conduit to China.

But opponents of the takeover, including a number of U.S. lawmakers, said letting a Chinese firm invest in a U.S. exchange was a bad idea. On the campaign trail, Donald Trump blasted the transaction after it was announced in early 2016. A year ago, the sale was cleared by a panel that reviews foreign takeovers for national security threats.

The deal hit a roadbump in August, when the SEC said its commissioners would review the sale, a surprise announcement that overrode the recommendation by the regulator's staff that it should be approved.

After the process stalled, several investors dropped out. Two Chinese entities, Chongqing Jintian Industrial Co. and Chongqing Longshang Decoration Co., left the consortium along with U.S.-based Xian Tong Enterprises Inc. Together, they'd planned to buy 36.44 percent of the exchange. Other investors in the buyers' group had agreed to purchase those stakes. In rejecting the takeover Thursday, the SEC said those three firms dropped out after the regulator asked for more information on their financial ties.

Chongqing Casin wanted to serve as a conduit to bring Chinese companies to the U.S. to raise capital. Hundreds of enterprises are waiting for IPO approval on exchanges in China, according to the China Securities Regulatory Commission. The Chicago Stock Exchange planned to leverage the Jumpstart Our Business Startups Act, a 2012 law Congress passed to make it easier for smaller companies to go public.

"I'm not too surprised," Richard Johnson, an analyst at Greenwich Associates, said of the rejection. "I thought this deal would always get additional scrutiny," he said. Johnson added that the exchange's plan to help Chinese companies go public in the U.S. didn't require owning an exchange. "They didn't need to buy a stock exchange to do that necessarily, so that motivation was a little unclear."
The U.S. Securities and Exchange Commission blocks a Chinese-led group of investors from buying the Chicago Stock Exchange.