WASHINGTON Five members of Congress urged the U.S. Securities and Exchange Commission on Thursday to stop the planned sale of the Chicago Stock Exchange Inc to Chinese investors led by Chongqing Casin Enterprise Group.
Led by Representative Robert Pittenger, a Republican on the Financial Services Committee and the Congressional-Executive Commission on China, the lawmakers argued that the Chinese investors were involved in market sectors in China that indicated they had close ties to the state.
The lawmakers also alleged that China's markets lack transparency and accused the Chinese government of being "the No. 1 state-sponsor of cyber-espionage."
"We urge you to consider rejecting this transaction," the lawmakers wrote in the letter to SEC Chair Mary Jo White and two commissioners.
They also asked for the SEC's one-month public comment period on the deal, which closes on Jan. 3, to be extended.
The letter was signed by Pittenger as well as Republican representatives Earl Carter and David Joyce and Democratic representatives Peter DeFazio and Collin Peterson.
The deal won approval this month from the Committee on Foreign Investment in the United States (CFIUS).
The SEC reviews proposed mergers involving exchanges to ensure they comply with federal regulations and appropriately self-police their brokerage members.
The Chicago exchange is privately held, and terms of the deal were not disclosed.
Relations between the United States and China could get choppy in the coming months. U.S. President-elect Donald Trump has already questioned the longstanding U.S. policy of acknowledging that Taiwan is part of "one China."
The Chicago exchange is a niche player in the U.S. equities market, executing about 0.5 percent of U.S. stock transactions. The exchange, with locations in Chicago and New Jersey, is mainly used by market makers that buy and sell the most active exchange-traded funds and hedge their positions using futures on CME Group Inc's (CME.O) Chicago Mercantile Exchange.
(Reporting by Diane Bartz; Editing by Cynthia Osterman)