HONG KONG/NEW YORK (Reuters) - Fast-fashion giant Shein is stepping up preparations for a London listing after its attempt to float itself in New York faced regulatory hurdles and pushback from U.S. lawmakers, two people with knowledge of the matter said.

The online fashion retailer plans to update China's securities regulator on the change of the initial public offering (IPO) venue and file with the London Stock Exchange (LSE) as soon as this month, said one of them.

Shein, which according to one of the sources was valued at $66 billion in a fundraising last year, started engaging with the London-based teams of its financial and legal advisors to explore a listing on the LSE early this year, said the source and a separate person familiar with the matter.

The China-founded fashion company has also approached London-based fund managers for introductory meetings ahead of the planned float, said another source with direct knowledge of the matter.

Shein and the LSE declined to comment. The CSRC did not respond to a request for comment.

Shein confidentially filed for an IPO with the U.S. Securities and Exchange Commission in November, and approached the China Securities Regulatory Commission (CSRC) to seek Beijing's nod in the same month, sources have said.

The plan for a U.S. IPO is still officially on the table, but the Singapore-based company has been struggling to clear regulatory hurdles both in the U.S. and China, amid lambasts from U.S. lawmakers on alleged labour malpractices and lawsuits from competitors.

The CSRC earlier this year informed Shein that the regulator would not recommend a U.S. IPO due to the company's supply chain issues, said a separate source.

While Shein is now gearing up for a London IPO, it still prefers New York as its listing venue and plans to keep its SEC application alive in case there is a change in the stance of U.S. regulators, said the second source.

It may also pursue a secondary U.S. listing in New York following its London IPO when it deems the U.S. political climate to be more favorable, the second source added.

Republican Senator Marco Rubio in February asked the SEC to block Shein's bid to list publicly in New York unless the e-tailer makes additional disclosures about its business operations and "the serious risks of doing business" in China.

The company has faced tougher-than-expected scrutiny from U.S. regulators in an election year. In a sign of the fraught nature of the application process, the SEC has yet to advance Shein's IPO filing, said the two sources.

The SEC did not respond to a request for comment.

Shein's plan to update the Chinese regulator on the London IPO would make it subject to Beijing's approval under the new listing rules for Chinese firms going public offshore, said the first source and a separate source.

The IPO, if it materializes, could be one of the largest globally this year, sources have said.

For London, it could mark a turnaround after companies such as U.K. chip designer Arm chose to list in New York to chase deeper pools of liquidity. So far this year, there have been just four U.K. IPOs out of more than 30 in Europe. 

Sky News reported in December, citing sources, that Shein's chairman Donald Tang met executives from the bourse and other stakeholders in the U.K. economy during a visit to London that month.