What's going on?

Late last week, the United States� financial markets regulator moved to block a deal that would have seen a Chinese-led group of investors buying the Chicago Stock Exchange.

What does this mean?

Compared to other exchanges in America, the Chicago Stock Exchange is pretty small: it represents less than 1% of all stock trading activity in the country! But back in 2016, a group of investors, led by China�s Chongqing Casin Enterprise Group, came up with the idea of giving it a new lease on life as an exchange allowing Americans an easier way to invest in smaller Chinese companies.


However, things hit a snag when the regulator voiced concerns over a foreign company having access to all of the financial data generated and managed by the exchange. Late on Thursday, it issued a statement saying that it could not resolve issues with the proposed ownership structure � in which 29% of the exchange would have been owned by a China-based shareholder.

Why should I care?

For markets: The deal could have given American investors greater access to high-growth companies.

While its growth has moderated a bit of late, the Chinese economy is still continuing to expand faster than the US economy. Giving American investors improved access to companies that are benefiting from that growth was one idea behind the Chicago deal, and smaller Chinese companies would have likely appreciated the access to American capital and the simpler process of �going public� on American markets.

The bigger picture: The White House has been getting tougher on foreign companies.

Last month, China�s Ant Financial was forbidden from buying American payments processor MoneyGram, while Verizon and AT&T both dropped their plans to market (Chinese) Huawei phones following security concerns raised by US government officials. The White House has also applied new tariffs on washing machines and solar panels imported into the US with the intention of protecting American manufacturers.