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The China Securities Regulatory Commission (CSRC) announced investigations and penalties against Hong Kong-registered brokers Futu Holdings and Longbridge, as well as New Zealand-registered Tiger Brokers. Authorities said the firms conducted securities-related business in mainland China without the required licences, violating Chinese securities laws.
China generally prohibits private citizens from directly investing in overseas markets unless they use approved channels. However, Hong Kong’s separate financial system enabled brokers to operate in a legal grey area for years, attracting mainland investors seeking foreign stocks and assets. In 2022, regulators already barred new mainland users from opening such brokerage accounts.
The CSRC said it will work with seven other agencies, including China’s central bank and public security ministry, to “completely eradicate” illegal cross-border securities activities over the next two years.
Futu Holdings, which owns the trading platform Moomoo, disclosed that authorities proposed a fine of about 1.85 billion yuan (US$271 million). The company said it had already stopped opening accounts for mainland Chinese users and had cooperated with regulators. Chinese investors make up about 13 per cent of its client base.
Meanwhile, UP Fintech Holding, owner of Tiger Brokers, said it was fined more than 411 million yuan, including confiscated illegal income. CEOs of the firms were also penalised.
Economists say Beijing’s main objective is to gain tighter control over capital leaving China and close loopholes enabling overseas investment.
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