The decision by the SEC has put an end to a two-year battle for an approval of the sale and emphasizes once again zero tolerance by Donald Trump' s administration toward Chinese buyers.
Unfortunately for the institution, the deal came at a complicated time in US-China relations when it was first proposed during the US presidential election campaign of 2016. The tie-up was initially approved by the Committee on Foreign Investment in the United States, pending further approval by the Securities and Exchange Commission (SEC).
Lawmakers in the U.S from both sides harshly criticized the deal through joint letters sent to the SEC, saying that it would allow the government of China to have access to the financial markets of the USA and questioned the ability of the SEC to monitor and regulate foreign owners.
The acquisition, which was proposed in February 2016 and worth about $25m, was led by Chongqing Casin Enterprise Group, a privately held company that invests in property development and financial holdings.
The exchange, which handles just 0.5% of U.S. stock trades, had said the deal would have proved the exchange with "vital capital".
In particular, the SEC said it was not satisfied that it would have full access to the exchange's books and records if the deal were to go through.
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While the investment got an initial vote of approval by SEC staff in August 2017, the commission ultimately ruled that the deal did not meet the rules that govern U.S. stock exchanges.
The Securities and Exchange Commission said a lack of information on the potential foreign buyers would cripple the agency's ability to monitor the exchange.
In its decision to reject the deal, the S.E.C. said the proposal left too many unanswered questions about who would ultimately have control over big decisions at the exchange.
The Chicago Stock Exchange, in a blog post Friday, said it was disappointed with the decision.
"Our government considers our stock exchanges-a key part of our national financial market infrastructure-to be "self-regulatory organizations, ' and presumes that each exchange is fully capable of managing the risk inherent in its operations", Manchin said in a statement to Breitbart News last July".