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SEC rejects Chicago Stock Exchange sale to Chinese investors

The arch of the former Chicago Stock Exchange building

The SEC on Thursday rejected the proposed sale of the Chicago Stock Exchange to a group headed by investors based in China.

The move reverses an Aug. 9 determination by the Securities and Exchange Commission's division of trading and markets to approve the sale of CHX Holdings Inc., the exchange's holding company, to North America Casin Holdings, a group led by China-based Chongqing Casin Enterprise Group.

SEC commissioners had asked that the division's decision be reviewed.

In its Thursday order, the SEC said it had "unresolved questions about whether the proposed new ownership structure would comply with the ownership and voting limitations" established by federal law to avoid any undue control on an exchange's operation. Also, according to the order, "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 proposed deal was opposed by President Donald Trump during his 2016 election campaign.

Terms of the acquisition, which was proposed in February 2016, were not disclosed by CHX.

CHX in a news release Friday afternoon said it was disappointed by the SEC action, adding that the order “contains logic and representations with which CHX strongly disagrees. 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.”

CHX is evaluating its options, the news release said.