China targets Tiger Brokers, Futu and Longbridge in cross-border crackdown

Chinese households chasing offshore stocks, and the global brokerages built to serve them, face a sharper squeeze after Beijing launched a two-year crackdown on cross-border trading channels.

China’s securities regulator said it would penalize Tiger Brokers, Futu and Longbridge for promoting securities trading and handling orders in mainland China without regulatory approval, a violation of the country’s Securities Law. The action was announced on May 22 and was backed by eight government departments, including the China Securities Regulatory Commission, the People’s Bank of China, the Ministry of Public Security and the foreign-exchange regulator.

The campaign is aimed at what Beijing calls illegal cross-border securities, futures and fund operations, but the policy message is broader: China is tightening capital controls while presenting the move as a push for market order. The official implementation plan calls for a two-year rectification period, giving regulators time to pressure brokers, police client accounts and shut down channels used by mainland investors to reach overseas markets.

The companies named are Tiger Brokers (NZ) Limited, Futu Securities International (Hong Kong) Limited and Longbridge Securities (Hong Kong) Limited. Their platforms have been especially important for mainland clients who want access to U.S. equities, Hong Kong shares and other foreign-listed products that are not easily available through official channels. In response, shares linked to the brokers fell sharply, showing how quickly regulatory pressure in China can spill into market value.

The timing matters. Demand for overseas exposure has stayed strong, while government-approved overseas stock funds have run through quotas and, in some cases, traded at hefty premiums to net asset value. At the same time, U.S. equities have been hitting record highs, giving Chinese investors more reason to look abroad. That demand has made online brokerages a crucial bridge, and a politically sensitive one.

The crackdown also fits a longer pattern. China barred private Chinese investors from opening accounts with such brokers in 2022, and Reuters-era reporting from December that year said Futu and Tiger Brokers were ordered to stop taking new mainland customers. Existing users were allowed to keep trading without adding fresh capital, but the latest move suggests the authorities now want to go further by forcing a broader cleanup of non-compliant accounts.

Financial consequences could be severe. Futu said Chinese authorities had proposed a fine of about 1.85 billion yuan, while UP Fintech said the CSRC fined it 308.1 million yuan and confiscated 103.1 million yuan of illegal income. Chinese investors accounted for about 13% of Futu’s total client base, a reminder of how much of these firms’ growth had been tied to mainland demand. With ill-gotten gains set to be confiscated and non-compliant accounts potentially liquidated over two years, Beijing is signaling that the era of easy offshore access through loosely regulated brokers is ending.