Far from threatening Hong Kong’s goal of becoming the region’s premier data and innovation hub, Beijing’s proposed regulation to screen mainland companies for cybersecurity before their initial public offerings in the city will help enhance its success. This is because it will provide clarity for bosses and potential investors, and offer extra transparency and security for customers, in addition to protecting such data on national security grounds, a key concern of Beijing. It’s true that the draft regulation, currently under public consultation by the Cyberspace Administration of China (CAC), will add an additional layer of vetting. But it will help the city play a more effective role in safeguarding data security. In any case, the draft law has made it clear that the vetting for IPOs in Hong Kong will not be as onerous as for those seeking to list overseas. It may be applied to companies with more than 1 million users. While the draft consultation is the first time the CAC has said national security reviews would apply to some listings in the city, mainland businesses would have been naive if they had thought listing here would give them a free ride. New cybersecurity probe rules apply to Hong Kong IPOs, complicating options The more lenient treatment will provide a great incentive for mainland tech companies with big data to choose Hong Kong for an IPO, rather than overseas, which usually means New York. It will therefore give the city an added comparative edge. Beijing has enhanced data governance standards with new laws and regulations this year. These include data security and personal information protection laws, which also regulate the flow of cross-border data. Increased cyber protection and scrutiny of companies that hold big data on national security grounds have been a worldwide trend. Hong Kong’s personal data protection law, which has not been significantly revised since its introduction in 1996, likely needs an update to be in line with the mainland’s tougher standards. It’s about time, too, in this era of big data leaks, cybercrimes and spying by foreign governments. Since last year, Beijing has been curbing the power and influence of Big Tech. That has raised fears and these will hopefully be allayed with greater legal clarity and consistency under the new rules.