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Julie Zhu and Yu Xie

HONG KONG– Chinese regulators are preparing to prohibit online brokerages such as Futu Holdings Ltd and UP Fintech Holding Ltd from providing offshore trading services to mainland customers due to issues about information security and capital outflows, individuals with understanding of the matter stated.

The Nasdaq-listed Chinese companies are 2 of the greatest gamers in this sector and a restriction would obstruct countless retail financiers in mainland China from trading securities quickly in markets such as the United States and Hong Kong.


Firms are most likely to be informed of a restriction in” the coming months,” stated among 4 sources who talked with Reuters. All sources decreased to be recognized as they were not licensed to talk with media.

Futu and UP Fintech, in service because 2011 and2014 respectively, enable mainland customers to open overseas accounts utilizing individual details such as regional ID cards, bank cards and tax records.

Both are signed up with the Securities and Futures Commission in Hong Kong however that license does not reach the mainland. No mainland license exists for online brokerages focusing on cross-border trades, the sources stated.

Futu, a $5.5 billion business by market price, stated in a declaration to Reuters it has actually been interacting with Chinese authorities however has actually not gotten any official orders along the lines of those recommended by Reuters reporting. It included that it is running generally.


It flagged in a prospectus for a follow-on share offering in April that its company might be impacted by a modification in position on the part of authorities who have broad discretion in analyzing guidelines.

UP Fintech, which is valued at $737 million, stated it has actually been following guidelines set out by international regulators and will adhere to and carry out any brand-new guidelines.

The China Securities Regulatory Commission( CSRC), the State Administration of Foreign Exchange( SAFE) and the reserve bank did not right away react to an ask for remark.

Chinese authorities raised issues about “cross-border” brokerages in October, worsening decreases in shares in both companies which have actually plunged more than 80


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