(Yicai) June 3 -- Tiger Brokers said the Chinese fintech company will suspend deposit and buying services for existing mainland investment accounts, days after the Chinese securities regulator accused it of unlicensed cross-border securities, fund, and futures businesses.

From June 12, Tiger Brokers’ mainland accounts will not be able to add positions for all investment products traded within China, permitting only position reductions and account closures thereafter, the firm announced yesterday, adding that it will also prohibit investors in China from depositing funds into their accounts from inside the country, while allowing them to withdraw funds as usual.

On May 22, the China Securities Regulatory Commission said that Futu Holdings, Longbridge Securities, and Tiger Brokers operated unlicensed cross-border securities, fund, and futures businesses in the mainland, and it would confiscate their illegal gains and impose fines on them. Futu and Tiger Brokers will likely be fined CNY1.85 billion and CNY411.2 million (USD273 million and USD61 million), respectively, while Longbridge will have all its illegal gains confiscated, as well as receive a fine.

Futu, Longbridge, and Tiger Brokers, through licensed overseas entities, provided a full range of securities brokerage, public fund distribution, and futures intermediary services, such as opening accounts, transactions, deposit, and withdrawal, and push notifications on industry information to domestic individuals without obtaining securities, fund sales, and futures business licenses from China’s securities and financial regulators, the CSRC noted.

The watchdog gave the three online brokers a two-year grace period. From May 2026 to May 2028, existing accounts are only allowed to sell or transfer funds, as they are forbidden from depositing or buying. After the grace period, all investor accounts will be shut down, and the companies will fully withdraw from the mainland market.

This is the largest law enforcement action targeting cross-border online brokers, marking the end of the gray era of unlicensed cross-border business operations.

Futu’s customer service said yesterday that there are no detailed guidelines yet for the two-year rectification period, adding that it will notify customers through official channels as soon as possible once the final arrangements are confirmed.

About 13 percent of Futu’s and 10 percent of Tiger Brokers’ clients come from the Chinese mainland. The two companies pledged to actively cooperate with the rectification and shift their strategic focus to Hong Kong, Macao, Southeast Asia, and the United States.

There is still a strong demand for overseas investment by Chinese mainland residents. They will now have to make offshore investment by legal means, such as the Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect, the Qualified Domestic Institutional Investor mechanism, and the Cross-Boundary Wealth Management Connect in the Guangdong-Hong Kong-Macao Greater Bay Area.

Editor: Futura Costaglione