Futu Holdings announced on Thursday that, effective June 12, mainland Chinese clients will no longer be able to open new positions, increase existing positions, or transfer funds into their brokerage accounts. The company framed the move as a response to recent regulatory measures restricting cross-border securities trading.
The statement from Futu follows similar public notices from Tiger and Longbridge earlier in the same week. All three brokerages have been singled out in the mainland regulator's action against overseas platforms and their domestic partners that are operating without formal approval.
On May 22 the China Securities Regulatory Commission disclosed a crackdown aimed at cross-border investment activity carried out by overseas firms and associated local entities lacking regulatory authorization. In that announcement the commission specifically identified Futu, Tiger and Longbridge, saying it would impose penalties for providing securities business services in China without the necessary approval or license. The regulator also said it would confiscate any illegal gains obtained by the trio.
The operational restrictions currently being put in place by the brokerages conform to the regulator's requirement that overseas institutions wind down prohibited cross-border activities within a two-year grace period. Under that framework, customers affected by the curbs are permitted only to sell existing holdings and withdraw funds from their accounts; the regulator's direction bars any new investments during the wind-down window.
The scope of the measures reported by the companies aligns directly with the penalties the regulator announced. Futu, Tiger and Longbridge have each informed clients of the limitations on trading and fund transfers that will apply to mainland investors, consistent with the CSRC's enforcement steps.
Context in brief
- Futu will stop allowing mainland clients to open or add to positions and to transfer funds into accounts from June 12.
- Tiger and Longbridge released comparable statements earlier in the week.
- The China Securities Regulatory Commission said it will penalize the three brokerages for operating without approval and will confiscate illegal gains.
- Regulators require a two-year wind-down period in which customers may sell holdings and withdraw funds but cannot make new investments.