Investors Want Chinese Takeover of Stock Market Blocked

Investors Want Chinese Takeover of Stock Market Blocked
A rival group of investors is trying to block a group of investors, of which 49.5 percent of the ownership is Chinese, from purchasing the Chicago Stock Exchange.

Investors told the Securities and Exchange Commission during a Tuesday hearing that they have been trying to prevent a Chinese takeover of the Chicago Stock Exchange.

POLITICO reported on the effort:

Lobbyists representing “Exchange Capital LLC,” a special-purpose entity for a private-equity investor group, said they helped generate a Sept. 26 letter led by Rep. Robert Pittenger (R-N.C.) to the SEC raising "serious concerns" over the CHX acquisition …

The CHX acquisition, announced in February 2016, quickly drew criticism from Republicans, including presidential candidate Donald Trump. The investor group comprises 50.5 percent U.S. owners and 49.5 percent private Chinese investors.

In December 2016, the Committee on Foreign Investment in the United States, the group of government regulators that vets international acquisitions of American assets, approved the CHX deal. But in August, the SEC delayed action on the purchase and has offered no timeline for when it will make a decision.

SEC staffers have reportedly recommended approval of the transaction. The CHX website features the following message:

The board and management of Chicago Stock Exchange (CHX) are delighted with the SEC staff’s order granting approval of the Exchange’s rule filing regarding the acquisition of CHX Holdings, Inc. by North America Casin Holdings, Inc. CHX recognizes the significant time that the Committee on Foreign Investment in the United States and the SEC staff spent analyzing the proposed transaction prior to their approval. We are confident that, upon further review by the Commissioners, they will also conclude that this transaction is consistent with the Exchange Act and will allow CHX to significantly add to Exchange staff, provide needed capital to the small and medium sized businesses that create jobs, and bring international business back to the United States.

CHX’s CEO John Kerin blasted the rival investor group in a statement to POLITICO in which he called their tactics “xenophobic fake news” meant to interfere with a “legitimate transaction.”

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