China’s cyberspace regulator has drafted new guidelines that will require the country’s large Internet companies to obtain its approval before they undertake any investments or fundraisings, sources familiar with the matter said on Wednesday.

The proposed requirements from the Cyberspace Administration of China (CAC) will apply to any platform company with more than 100 million users, or with more than 10 billion yuan ($1.58 billion) in revenue, they said.

Any Internet firm involved in sectors named on the negative list issued by China’s National Development and Reform Commission (NDRC) last year will also need to apply for approval, the sources said.

Some Internet companies have already been briefed, they added, and the draft rules are still subject to changes.

The sources declined to be identified as the information was not yet public. The CAC did not immediately respond to a Reuters request for comment.

The proposed rules would intensify the oversight from China's increasingly assertive regulators, who have over the past year reined in formerly freewheeling internet giants in areas from dealmaking to their handling of user data.

It was not immediately clear what types of investments or fundraisings could be impacted. One senior technology industry executive said there were concerns whether it would be applied to private market investments, such as pre-IPO private funding rounds.

China has routinely updated a negative list prohibiting foreign investment in sectors such as compulsory education institutions, news organisations and rare earth minerals.

Chen Weiheng, partner and head of US law firm Wilson Sonsini’s Greater China practice, said the CAC “internal practice guidance”, if confirmed, could significantly impact the investment landscape of the Internet and “even end the era for big Internet platform operators”. Reuters