China Penalizes Nasdaq-Listed Brokers in Cross-Border Trading Crackdown
China’s Securities Regulator Targets Nasdaq Brokers in Cross-Border Trading Sweep
China's securities watchdog announced plans to penalize two Nasdaq-listed online brokerages—Tiger Brokers and Futu Holdings—alongside privately-owned Longbridge Securities for conducting unauthorized cross-border trading activities on the mainland.
Illegal Operations and Regulatory Response
The China Securities Regulatory Commission (CSRC) stated that these firms marketed and processed trading services without required licenses. Authorities will confiscate all illegal gains from related entities, including Tiger Brokers’ New Zealand subsidiary and Futu Securities’ Hong Kong unit.
The move is part of a wider joint crackdown led by eight government bodies, including the central bank and public security ministry. The new directive bans foreign entities from offering unlicensed securities, futures, and fund trading services to mainland investors, and also targets domestic banks that assist them.
Market Impact and Company Responses
Following the announcement, Futu Holdings’ ADRs fell 28% and Tiger Brokers’ ADRs dropped 25%. Both companies did not immediately respond to requests for comment. Longbridge, however, said it would comply with regulatory requirements, noting that its Hong Kong-licensed operations remain normal and client funds are safe.
The CSRC vowed to make supervision “sharp-toothed and thorny” and to crack down severely on overseas institutions illegally doing securities business in China.
Impacted Symbols
Symbols affected by this headline and their sentiment signals
Futu Holdings Limited
Chinese regulator announced penalties against Futu for unlicensed activities; illegal gains will be confiscated and cross-border services restricted, potentially hurting revenues.
UP Fintech Holding Limited
Regulatory penalties and cross-border trading restrictions on Tiger Brokers threaten its core business; shares plunged sharply.
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