The China Securities Regulatory Commission (CSRC) has ordered online brokerage firms Futu and UP Fintech to stop accepting new onshore clients for violating the country’s capital control rules.
The regulator said that both the firms were conducting unlawful securities activities and would be prohibited from opening new accounts for investors in mainland China.
It allows the current customers to continue trading on Futu and UP Fintech, which operates Tiger Brokers, without adding new funds.
Both the platforms helped Chinese investors with offshore trading services for the last couple of years without obtaining licences in China.
In an emailed statement seen by South China Morning Post, a UP Fintech representative said that the firm “will continuously offer legitimate services to existing onshore customers in mainland China.
“While actively cooperating with the regulators, the company will take corrective measures to stop enrolling new onshore customers.”
UP Fintech also noted that the CSRC move will not affect its operations outside mainland China.
Futu said that it will cooperate with CSRC.
In a statement, the broker noted: “The Company will proactively seek guidance from and cooperate with the CSRC in connection with its efforts to ensure legal compliance of its business activities in mainland China.
“In the meantime, the Company will continue to provide high-quality services to existing clients in China and further strengthen and expand its international operations.”
Meanwhile, Futu postponed its listing in Hong Kong in order to ‘clarify certain matters’ with the Hong Kong bourse.