China's securities regulator, alongside seven other government agencies, announced a crackdown on illegal cross-border trading on May 22. The trigger: an estimated $1 trillion in unauthorized capital left China in 2025, the largest outflow since records began in 2006.
Fines totaling $330 million were levied against Futu Securities, Tiger Brokers, and Longbridge Securities. The CSRC is ordering full liquidation of non-compliant accounts within two years, blocking new purchases. This escalates 2022 rules that grandfathered in legacy accounts.
Existing clients can sell but not buy. The affected brokers saw shares plummet. For investors, forced wind-downs loom. Domestic brokers may see a tailwind as demand shifts to compliant, licensed platforms.