Chinese brokerages offering overseas investing services to mainland clients have come under pressure from a regulatory push that seeks to seal off one of the few remaining loopholes in the country’s strict capital controls, reports the Financial Times. A new regulation coming into force this week from the China Securities Regulatory Commission reiterates the need to prevent “illegal cross-border securities businesses,” building on a multiyear initiative to clamp down on such services.
The measure broadens a ban in December on registering new clients in mainland China, which originally applied to UP Fintech Holding, also known as Tiger Brokers, and Futu Holdings, a brokerage backed by tech giant Tencent, ahead of the regulation’s official publication.
The brokerages, which often help Chinese tech workers manage employee equity received from outside the country, until recently had allowed mainland clients to open accounts despite not being licensed to provide overseas investment services.