BEIJING, May 22 (Xinhua) -- The China Securities Regulatory Commission (CSRC) announced on Friday that it will resolutely crack down on Tiger Brokers (NZ) Limited, Futu Securities International (Hong Kong) Limited and Longbridge Securities (Hong Kong) Limited for illegal cross-border business operations.
The CSRC stated that the activities of these brokerages have violated China's laws and regulations concerning securities, funds and futures, and have disrupted market order.
In accordance with relevant regulations, the regulator plans to confiscate all illegal gains from the associated domestic and overseas entities of Tiger, Futu and Longbridge, while also imposing severe penalties in keeping with the law.
In a broader move, the CSRC and seven other government departments recently issued a joint implementation plan, approved by the State Council, to comprehensively eradicate illegal cross-border securities, futures, and fund operations within a two-year rectification period.
Under the plan, the two-year period has been set to wind down existing illegal businesses. During this timeframe, overseas institutions are strictly prohibited from facilitating new buy orders or capital inflows for existing investors of the Chinese mainland. Only sell orders and capital withdrawals will be permitted.
Upon the period's expiration, these overseas institutions must completely shut down their mainland-targeted websites, trading applications, and supporting servers.
In recent years, unlicensed overseas brokerages have disrupted China's financial market order by soliciting mainland clients through domestic affiliates and offering overseas stock trading services via digital platforms.
The CSRC clarified the illegality of such activities on Dec. 30, 2022, launching an initial crackdown on overseas brokers like Futu and Tiger. The regulator banned them from expanding illegal operations, soliciting mainland investors, or opening new accounts.
Addressing market concerns, the plan emphasizes that the asset security of existing investors will remain unaffected. A CSRC official stated that the phased suspension is designed to safeguard clients, requiring overseas institutions to arrange proper account disposal and maintain communication with those affected.
Market insiders noted that the crackdown specifically targets illegal cross-border operations and will not affect legitimate investment channels. Investors can continue to access overseas markets through authorized mechanisms such as the Stock Connect, the Qualified Domestic Institutional Investor (QDII) program, and the Cross-boundary Wealth Management Connect. This phased approach ensures that the overall impact on overseas markets continues to be manageable. ■
