China to Penalize Nasdaq-Listed Brokers Amid Cross-Border Trading Crackdown — Update
By Jason Chau
China's securities regulator said it plans to impose penalties on two Nasdaq-listed online brokerages over trading infractions in the mainland.
The China Securities Regulatory Commission said Friday that authorities will confiscate all illegal gains from domestic and overseas entities related to Tiger Brokers' New Zealand subsidiary and Futu Securities' Hong Kong unit, as well as privately owned Longbridge Securities' Hong Kong unit.
The three brokerages conducted cross-border securities businesses activities in mainland China without obtaining the required licenses, the CSRC said. These include the marketing and promotion of trading services, and the processing of trading instructions, it said.
Tiger Brokers and Futu didn't immediately respond to requests for comment on Friday.
In an emailed statement over the weekend, a spokesperson for Longbridge said that it will comply with regulatory requirements and implement all rectification measures.
"Licensed entities including Long Bridge HK Limited are regulated by financial regulators such as the Securities and Futures Commission of Hong Kong," the spokesperson said. "Business operations remain normal, and client funds are held in independent custodian accounts, with their safety unaffected."
American depositary receipts of Futu Holdings and Tiger Brokers, which trades as Up Fintech Holding, tumbled 28% and 25%, respectively, on Friday.
In its statement, the CSRC said it will "continue to firmly implement regulatory requirements to make supervision 'sharp-toothed and thorny,' with clear force and edge." The regulator will also "severely crack down on overseas institutions unlawfully conducting securities business within China," it said.
The move came amid a joint regulatory crackdown on cross-border investment services in the mainland announced Friday by eight government agencies including the securities commission, China's central bank and the Public Security Ministry.
Under the new directive, authorities will ban foreign entities from offering unauthorized securities, futures and fund-related trading services to mainland investors, such as account opening and fund transfers. Domestic partners, including banks, that assist these overseas organizations will also be penalized.
Write to Jason Chau at jason.chau@wsj.com
(END) Dow Jones Newswires
May 24, 2026 23:06 ET (03:06 GMT)
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