China has shut down a major channel for retail traders to buy overseas stocks. BEIJING, May 22, 2026, 20:00 CST
- Tiger Brokers, Futu Securities International and Longbridge Securities were targeted by China’s securities regulator for running unauthorized cross-border securities operations in mainland China, the agency said.
- Affected clients will have two years to sell what they own and take out their money, but buying more or moving in new funds won’t be allowed.
- Futu and UP Fintech, the parent of Tiger, dropped in U.S. premarket trading. Alibaba and PDD also traded lower.
China started a sweeping crackdown on illegal cross-border securities trading Friday, giving offshore brokers two years to close unlicensed services. Regulators also said they would penalize three online platforms that let mainland investors purchase assets abroad.
China’s securities regulator said it started cases against Tiger Brokers (NZ) Limited, Futu Securities International (Hong Kong) and Longbridge Securities (Hong Kong), accusing them of running trading and marketing operations in China without proper licences. The CSRC said onshore and offshore arms of these firms marketed trades, processed transactions and made money inside China without approval. Regulators plan to seize all illegal gains but didn’t say how much that could be.
Offshore brokers have to quit mainland business under the eight-agency clampdown. Regulators are moving from warnings to a forced pullout. Starting now, international securities, futures, and fund firms can’t pitch, open accounts, process trades, or transfer money for mainland Chinese clients. The only way out for current clients is to sell what they hold and pull out funds. Buying more is off the table.
The move comes at a delicate time for capital controls. China’s rules on money leaving the country are under scrutiny after Bloomberg Intelligence said $1.04 trillion in so-called “hot money” exited China in 2025. That’s the biggest annual outflow since at least 2006, according to their data. The Business Times
Markets swung after the news. Reuters said Futu Holdings and UP Fintech, the parent of Tiger, sank over 30% in U.S. premarket trade. PDD Holdings slipped about 6%, while Alibaba lost 4%. Hang Seng futures dropped 0.7% after the announcement, which hit after Hong Kong and mainland markets had closed.
The CSRC said Futu, Tiger and Longbridge broke securities, fund and futures rules by letting mainland investors buy U.S. and other foreign stocks. The agency said these firms “disrupted market order.” Mainland traders had used their platforms to get into overseas shares. South China Morning Post
Steven Leung, director of institutional sales at UOB-Kay Hian in Hong Kong, told Reuters the move could “cool down some trading and speculative activities in Hong Kong” for now. Reuters
Tiger told Reuters that compliance is still its top priority. The company said it would work with regulators and said business was running as usual. Futu said it stopped taking mainland applicants, had already rejected tens of thousands of applications that didn’t qualify, and that mainland investors were 13% of its clients at the end of Q1. Longbridge did not respond to Reuters requests.
The State Council signed off on the new plan, with backing from eight bodies such as the CSRC, the central bank, the FX regulator, public security and China’s cyberspace agency. The rules target offshore companies, onshore partners, banned go-betweens, online platforms and social media accounts posting guides or ads for account opening.
Legal ways for investors to put money overseas are still open, regulators said. These include Stock Connect, which lets traders use the Hong Kong link, the Qualified Domestic Institutional Investor (QDII) quota for licensed mainland firms, and Wealth Management Connect in the Greater Bay Area.
Hong Kong’s Securities and Futures Commission on Friday told 12 securities brokers to review and shut accounts opened with suspect documents, after finding poor checks, possible fake paperwork, and shaky cross-border correspondent links. The SFC reviewed account openings at those brokers. “Firms should not grow business at the expense of know-your-client standards,” said Eric Yip, executive director of intermediaries at the SFC. AAStocks
There’s still a risk that broker revenue, client liquidity and Hong Kong trading flows take a hit if enough mainland-linked accounts are only able to sell over the two-year window. Another unknown remains as well. The CSRC said named firms can defend themselves, make representations, and ask for hearings ahead of any final penalties.
The CSRC is stepping up its crackdown that started in late 2022, when it began blocking offshore firms from soliciting mainland investors and opening new accounts. Now, the regulator says it’s cleaning up the full cycle — from marketing to account openings, order processing, and fund flows. The aim is to force offshore brokerages out of the mainland market.
