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RPT: China unveil new financial information rules

Posted on: May 5, 2009


Reuters – Thursday, April 30

BEIJING, April 30 – China on Thursday unveiled new rules governing foreign providers of financial information, demanding that they not furnish domestic clients with information that could destabilise markets or stir up social tension.

The rules, which will affect the operations of companies like Bloomberg, Dow Jones <NWSa.N> and Thomson Reuters <TRI.TO> <TRIL.L>, were carried by the official Xinhua news agency.

Foreign financial information providers must not distribute data that “contravenes the basic principles of the constitution of the People’s Republic of China”, the rules state.

Other banned content includes data that threatens state security or national unity; fake financial information; and information that “damages the economy, finances, the capital markets or social stability”.

The rules come into effect on June 1, and will be overseen by the State Council Information Centre, which is replacing Xinhua as regulator.

China considers some information to be state secrets and once jailed reporters for leaking sensitive financial data.

China last year resolved a trade dispute over financial information with the United States, European Union and Canada without going to a full World Trade Organisation dispute panel.

Brussels and Washington had objected to the way Beijing regulated foreign providers of financial information. China had required foreign suppliers of financial information to operate in China through an entity controlled by state news agency Xinhua, instead of dealing directly with customers.

But Xinhua also competes with the foreign vendors. It launched a financial information service in June 2006.

Canada joined the dispute following the acquisition of Reuters Group in April 2008 by Thomson Corp.

Under agreements signed by China with the three parties, Beijing pledged to create an independent regulator for foreign financial information providers by June 2009.

That ends Xinhua’s role as a regulator and the requirement for foreign suppliers to trade through an agent designated by the Chinese government, the European Commission said at the time.

The dispute did not involve news agency services, which are outside China’s WTO commitments. (Reporters and editors involved in writing and editing this report may own Thomson Reuters securities and are bound by a Code of Conduct, which restricts dealing in securities on which a journalist is reporting)

(Reporting by Benjamin Kang Lim; Editing by Nick Macfie and Dean Yates)

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