China’s securities regulator has imposed severe penalties on three major brokerages—Futu Securities International, Tiger Brokers, and Long Bridge Securities—for providing unauthorized access to overseas stock trading for mainland investors. The China Securities Regulatory Commission (CSRC) found that the firms promoted securities trading, handled orders, and provided related services without regulatory approval, violating China’s Securities Law and disrupting market order.
Illegal gains confiscated, cleanup plan announced
The CSRC ordered the confiscation of all illegal gains and indicated that further penalties are forthcoming. In a coordinated move, eight government departments including the central bank and cybersecurity regulator unveiled a two-year cleanup plan. During this period, affected brokerages may only sell securities for existing mainland clients; they are barred from opening new accounts, accepting fresh funds, processing buy orders, or enabling new fund transfers. Existing accounts will not be forcibly closed, and assets held in them will not be liquidated, aiming for an orderly wind-down.
This enforcement escalates an earlier crackdown from December 2022, when the CSRC instructed some overseas brokerages to stop adding mainland clients. Approved routes for overseas stock investment—such as the Stock Connect program with Hong Kong, QDII funds, and the Wealth Management Connect scheme—remain unaffected.
Crypto services probe adds further pressure
In a parallel development, Chinese regulators are separately investigating the same three firms over their cryptocurrency-related services, according to a Foresight News report. Futu, often called the ‘Robinhood of China,’ holds a license to operate a crypto trading platform in Hong Kong, while Tiger Brokers and Long Bridge have also facilitated crypto trading for Hong Kong-based retail clients. The probe signals Beijing’s continued scrutiny of digital asset activities, even as Hong Kong pushes its ambition to become a global crypto hub.
The dual actions highlight the tension between mainland China’s strict anti-crypto stance and Hong Kong’s regulated crypto framework. Investors may face reduced access to cross-border trading services, and the outcome could set a precedent for how crypto-friendly services are treated by mainland regulators. Market watchers are monitoring for potential fines, license revocations, or operational restrictions that could reshape the brokerage landscape in the region.
