China Securities Regulatory Commission Plans to Severely Punish Tiger, Futu, and Changqiao in Accordance with the Law

The China Securities Regulatory Commission (CSRC) has announced its intention to impose administrative penalties on Tiger Brokers (NZ) Limited, Futu Securities International (Hong Kong) Limited, and ChangJiao Securities (Hong Kong) Limited.

The CSRC points out that the aforementioned three institutions have engaged in illegal cross-border business practices, violating the relevant laws and regulations on securities, funds, and futures in China, and have disrupted the order of the domestic capital market. The CSRC emphasizes that such behaviors must be resolutely combated.

Recently, with the approval of the State Council, the CSRC and seven other departments jointly issued the "Comprehensive Rectification Plan for Illegal Cross-Border Securities, Futures, and Fund Business Operations," clearly stipulating that after two years of intensive rectification, all illegal cross-border operations of overseas securities, futures, and fund business institutions will be completely banned.

According to the plan, a two-year intensive rectification period is set to clear out illegal existing businesses. During the rectification period, it is prohibited for overseas institutions to provide existing investors in the country with illegal buy transactions, fund transfers, etc., only allowing one-way sell transactions and fund transfers out. After the completion of the rectification period, overseas institutions must fully shut down domestic websites, trading software, and supporting servers, prohibiting the illegal provision of trading and other services for existing investors in the country.

According to relevant legal provisions, the CSRC intends to confiscate all illegal earnings of the relevant entities of Tiger, Futu, and ChangJiao within and outside the country, and impose severe fines.

Market insiders analyze that this move sends a clear signal from the regulatory authorities to continue strengthening the supervision of cross-border securities activities and maintain the order of the domestic market, and the enforcement intensity against illegal cross-border operations may further increase in the future.