18.02.201820:07:00UTC+00U.S. Rebuffs China-led Merger Offer for Chicago Stock Exchange

The U.S. has spurned a proposed merger between the Chicago Stock Exchange and a Chinese-led investor consortium, stating that the agreement was not in line with the rules that govern U.S. stock exchanges.

The decision comes after over two years of review by officials. Initially, the acquisition received a greenlight from the Committee on Foreign Investment in the U.S. and was subject to further approval by the Securities and Exchange Commission.

Under the deal, the Chinese-led North America Casin Holdings group would have acquired CHX Holdings, which oversees the Chicago Stock Exchange. The bourse handles only 0.4 percent of the total stocks traded in the country. According to the Chicago Stock Exchange, if completed, the deal would have provided the bourse with “vital capital” that could have been utilized to bolster several initiatives that would be advantageous for the city of Chicago, the U.S. economy and the market structure.

While the deal had received an initial vote of approval by SEC in August 2017, the regulator ultimately decided that it did not reach certain standards. SEC added that the revew raised questions about whether the proposed ownership structure would enable the commission to impose proper oversight of the exchange. The decision comes after several moves by U.S. politicians, including U.S. President Donald Trump, to deter Chinese companies doing business in the U.S. or partnering up with U.S. companies to sell their goods in the countries.