[Photo: by CoStar Group]

Back in February 2016, the Chicago Stock Exchange (CSX) agreed to sell itself to a Chinese investor group, the Chongqing Casin Enterprise Group. However, the SEC has yet to approve the deal and, on Wednesday, the regulator said it would once again postpone a decision.

While the proposed $20 million deal for CSX is relatively small - the exchange accounts for less than 0.5% of U.S. equity trade volume - some lawmakers have raised security concerns about Chinese investors buying into the U.S. equity market. For example, they've questioned whether Chinese owners could sift secrets about trading strategies and other matters from the stream of orders that rush through exchange systems.

Given those concerns, the CSX separately sought deal approval from the U.S. Committee on Foreign Investment, which includes representatives from the Treasury and Defense departments. That committee approved the deal in December. 

However, future prospects for approval would appear limited at this time. The federal government has little incentive to approve any Chinese acquisitions in the United States, given current U.S.-N.Korea tensions and Trump's frustration with China for not havign done more to convince North Korea, its trading partner, to scale back its threats and nuclear missle tests. 

All this is most unfortuate for the 135 year old exchange, which is hoping to revitalize its market into a U.S. listing outpost for Chinese companies.