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China Moves To Shut Down Offshore Stock-Trading Channels Used By Mainland Investors

Authored by Arthur Zhang via The Epoch Times,

China’s securities regulator has opened enforcement actions against Futu, Tiger Brokers, and Longbridge Securities, accusing the offshore online brokerages of illegally serving mainland investors who used the platforms to trade U.S. and Hong Kong stocks.

The China Securities Regulatory Commission (CSRC) said on May 22 that it had opened investigations and issued administrative penalty pre-notification letters against Tiger Brokers (NZ) Limited, Futu Securities International (Hong Kong) Limited, Longbridge Securities (Hong Kong) Limited, and their related onshore and offshore entities.

The regulator said the firms conducted securities brokerage and margin-financing services in mainland China without approval and also “illegally” engaged in public-fund sales and futures brokerage activities.

The action was announced alongside a broader campaign by eight Chinese agencies to “comprehensively rectify” cross-border securities, futures, and fund operations.

The agencies involved are the CSRC, Ministry of Industry and Information Technology, Ministry of Public Security, People’s Bank of China, State Administration for Market Regulation, National Financial Regulatory Administration, Cyberspace Administration of China, and State Administration of Foreign Exchange.

2-Year Wind Down

The eight-agency implementation plan sets a two-year rectification period to phase out unauthorized mainland-facing services by offshore securities, futures, and fund institutions. During that period, offshore firms are barred from providing existing mainland investors with buy orders or fund-inflow services; only one-way selling and fund withdrawals are permitted. After the period ends, the firms must shut down mainland websites, trading software, and supporting servers.

The CSRC said investor property safety would not be affected by the rectification campaign and that affected overseas institutions must communicate with mainland investors and arrange account handling.

The policy effectively turns affected mainland-facing accounts into exit-only vehicles—investors can sell positions and withdraw funds, but cannot buy new purchases or add funds. It does not amount to confiscation of client assets, but it closes a private, app-based route that had allowed Chinese retail investors to trade overseas securities more directly than through Beijing-approved channels.

The implementation plan also extends beyond the brokerages themselves. It targets offshore institutions, mainland affiliates and partners, intermediaries, internet platforms, apps, and online self-media accounts that publish account-opening tutorials or other promotional materials for unauthorized cross-border trading.

Futu, Tiger Disclose Penalties

Futu Holdings, which is listed on Nasdaq, said it received a notice of investigation and an administrative penalty pre-notification letter from the CSRC and its Shenzhen bureau. The company said the regulator proposed ordering related entities to rectify or cease the activities, confiscate illegal gains, and impose fines totaling about 1.85 billion yuan, or about $271 million. The CSRC also proposed a personal fine of 1.25 million yuan, or about $183,575, against Futu founder and CEO Li Hua.

Futu said the proposed penalty remains subject to further proceedings and final determination by the CSRC. The company said it is entitled to submit statements, present defenses, and request a hearing. It also said mainland Chinese accounts accounted for about 13 percent of total funded accounts at the end of the first quarter of 2026, while business operations outside mainland China remain normal.

UP Fintech Holding, the Nasdaq-listed parent of Tiger Brokers, said in a Form 6-K exhibit that certain subsidiaries received notices from the CSRC’s Beijing Bureau on May 22. The company said the bureau accused the subsidiaries of conducting unlicensed cross-border securities business and fund and futures activities in mainland China. UP Fintech said the bureau imposed administrative penalties totaling about 308.1 million yuan (about $45.34 million) and confiscation of income totaling about 103.1 million yuan (about $15.17 million). It also said CEO and controlling person Wu Tianhua received a warning and a 1.25 million yuan penalty (about $183,965).

UP Fintech said retail client assets in mainland China under its consolidated accounts represented about 10 percent of total client assets at the end of 2025. The company said it accepts the penalty, is cooperating with regulators, and will implement required rectification measures.

The CSRC stated it intends to confiscate all “illegal gains” from Tiger, Futu, Longbridge, and related entities, but its public announcement did not disclose a combined illegal-income figure for all three firms.

The announcement triggered sharp selling in Futu and UP Fintech shares. Futu closed at $89.76, down $34.09, or 27.5 percent, after trading as low as $73.02 intraday. UP Fintech closed at $4.36, down $1.49, or 25.5 percent, after trading as low as $3.18 intraday.

Years in the Making

The May 22 enforcement action marks an escalation of a campaign that began more than three years ago. In its official Q&A, the CSRC said it began rectifying cross-border operations by offshore institutions on Dec. 30, 2022, to bar such institutions from “illegally” soliciting mainland investors and opening new accounts for them.

The latest plan expands the campaign from individual enforcement to full-chain governance. The CSRC said the new requirements cover marketing, account opening, processing trading instructions, fund transfers, internet platforms, apps, and independent content creators that guide mainland investors into unauthorized offshore accounts.

The regulator said offshore institutions and related mainland entities “violate Chinese law” if they conduct securities, futures, or fund business in mainland China without state approval, whether directly or through affiliates and partners. It also said related violations involving cybersecurity, personal information protection, anti-money laundering, and foreign-exchange rules are included in the state’s “rectification campaign.”

Tech-Linked Brokers in the Crosshairs

Futu, Tiger, and Longbridge built their appeal by offering digital brokerage platforms that made it easier for Chinese-speaking retail investors to trade U.S. and Hong Kong securities.

Futu’s founder, Li Hua, was a former Tencent employee, and Tencent has been a major shareholder of the digital brokerage firm. Tiger Brokers was founded by Wu Tianhua, a former NetEase executive, and has counted Xiaomi as a strategic investor. Longbridge is a newer online brokerage with a founding and investor background often associated with China’s internet sector, according to Chinese state media.

The official allegation by the CSRC did not frame the action as a campaign against those technology companies. Still, the cases fit a broader pattern in which Beijing has brought app-based financial activity under tighter state supervision, especially where online platforms touch securities trading, fund flows, investor data, and cross-border transactions.

Capital-Control Signal

The CSRC described the campaign as a move to protect investors, maintain financial-market order, and guide outbound investment through lawful channels. In its Q&A, the regulator said investors can use routes such as Hong Kong Stock Connect, Qualified Domestic Institutional Investor (QDII) products, and Cross-boundary Wealth Management Connect (Cross-boundary WMC) for overseas investment.

Those channels are more limited than direct app-based trading in U.S. and Hong Kong stocks. Stock Connect covers eligible Hong Kong-listed securities rather than the full U.S. market. QDII products are managed through approved institutions and quotas. Cross-boundary WMC is limited by geography, product scope, and eligibility rules.

That makes the policy more than a licensing dispute. Beijing is not banning all offshore investment by mainland residents, but it is closing a private route that made foreign securities more accessible to ordinary investors. The structure of the rule pushes capital back toward channels that regulators can monitor, limit, and adjust.

On Chinese social media, some users reacted with frustration, saying the move narrows ordinary households’ ability to diversify outside China’s domestic markets. Others doubted that money previously invested through offshore brokers could be redirected toward mainland A-shares.

There is a broader concern among retail investors that Beijing is reducing access to overseas assets while China’s domestic stock market continues to struggle with investor confidence.

Tyler Durden Mon, 05/25/2026 - 19:55

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'Weeks Inside Highly Fortified Bunkers': Report Details Painfully Slow Communication Within Iran's Leadership

According to a Sunday CBS News report citing US officials, Iran's Supreme Leader Mojtaba Khamenei is still in hiding in a secret location with extremely limited communication to the outside world. Driven underground by a pervasive fear within Tehran's remaining leadership structure following relentless US and Israeli military strikes, the Supreme Leader is effectively isolated.

This information is nothing 'new' - but even as talks with the US are now little by little reportedly proceeding - and as a ceasefire has been extended by weeks - the Ayatollah is clearly not taking any chances. The CIA and Mossad have openly acknowledged that are actively looking for his hideout. But the report seeks to provide an explanation as to why Tehran's response to any specific updated draft peace deal often takes several days.

CBS detailed how the isolation is to keep Western intelligence from mapping his coordinates, which involves only being reached via a slow, archaic network of physical couriers designed to conceal his location.

The report further alleges that these heightened security measures have significantly disrupted communication lines within Iran's government, complicating active negotiations with the Trump administration and at times dragging responses to US peace proposals to a grinding halt.

But this is also to a large degree by design, to allow the different military units autonomy of command in the instance for more 'decapitation strikes' targeting governing centers in Tehran.

The end result, says CBS, is that "When the U.S. sends proposed details, the difficulty in reaching the supreme leader means there can be a long delay before the U.S. receives a response, two of the officials said."

Yet, it wasn't long ago that White House officials and mainstream pundits were insisting that the Ayatollah is not actually in charge of the country. But now assumptions have shifted back, apparently.

The report claims further:

At this point, most Iranian leaders don't see daylight, spending weeks inside highly fortified bunkers and avoiding speaking to each other unless absolutely necessary, the sources said. 

"Watching them try to figure out how to talk to each other is almost like watching a sitcom. They are completely exasperated," one official said. 

The most cautious measures are being taken by the supreme leader. 

By design, even officials at the highest levels of the Iranian government don't know where he is and have no way to contact him directly. 

One official followed with: "This is why you see people saying things like, 'The supreme leader has agreed to the framework,' or 'We're waiting to hear back on the final deal points.' Every piece of information he receives is dated and there's a lot of latency to his responses," one official said.

U.S. intelligence: Iran's Supreme Leader, Mujtaba Khamenei, is hiding in an undisclosed location with limited access to the outside world, relying on a network of couriers to send and receive messages. (CBS News)

Isn't that common sense?

— Pakistan Walli (@pakistanwalli) May 25, 2026

It has become obvious that the negotiations process has become painfully slow and confused, and so this narrative by anonymous US officials seems an effort to lay blame squarely on the Iranians, instead of Washington's own often shifting goals and conditions.

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