Connect with us

Hi, what are you looking for?


China monitors capital flows as online brokers pull down apps

CHINA is taking a tougher stance on capital flows out of the country as the nation’s two leading cross-border online brokerages decided to remove their trading platforms from app stores in the mainland.

Futu Holdings Ltd. and Up Fintech Holding Ltd., also known as Tiger Brokers, said Tuesday that the move was to comply with the Chinese securities regulator’s requirements on cross-border brokerage businesses. Futu’s app Futubull will be removed Friday, and Tiger Brokers’ app will be taken off on Thursday.

Existing clients in mainland China can continue to use the apps to make trades, and users outside of the country won’t be affected, the brokers said. Futu and Up Fintech have been operating in a gray area for their mainland China businesses, allowing millions of local investors to evade capital controls to trade shares in markets such as Hong Kong and New York.

China has increased scrutiny of operations that could risk financial stability and national security in recent months, especially as relations with the US worsened and demand rose among mainlanders to move wealth offshore as China reopened from Covid zero. Lines at Hong Kong bank branches had hours-long waiting times in early May during the Golden Week holiday, as tourists from the mainland tried to open an account in the region.

“The actions on Futu and Tiger Brokers clearly show China’s grand agenda remains focused on financial security,” said Robert Lee, a Hong Kong lawmaker representing the financial services sector. “As long as one complies with the rule, it is still permitted to get Chinese clients.”

Beijing has also recently tried to rein in expert network consultancies operating in the country, ensnaring companies like Capvision Pro Corp. which Chinese state media has accused of leaking state secrets.

Chinese regulators asked Futu and Tiger Brokers in late 2022 to rectify “illegal” business activities and stop taking new onshore investors, saying the companies had over the years conducted cross-border securities trading business without approval from the China Securities Regulatory Commission. It followed similar criticism from a senior central bank official, who had questioned the legitimacy of online trading firms, calling their services “illegal” at least twice since 2021.

The criticism had prompted the companies to shift their focus away from the domestic market, with Tiger Brokers resorting to job cuts and Futu eyeing overseas markets to diversify its growth. Futu also abruptly postponed its Hong Kong listing less than a day before its scheduled debut last year.

“The move is in line with the regulatory stance from late last year and early this year, and is part of the rectification progress as we see the measures being implemented,” said May Zhao, head of equity research at Zhongtai Financial International Ltd. “It’s not a total surprise.”

The brokerages’ mainland China client base is expected to remain intact despite removal of the apps, analysts at Citigroup Inc. led by Judy Zhang wrote in a note. They cited the case when Didi was taken off mainland app stores in 2021, saying it managed to retain a majority of its customers due to lack of high quality alternatives.

Futu shares closed 4.4% lower in New York Tuesday, while shares of Up Fintech dropped 7.4%, with both recouping some earlier losses.

Mainland customers accounted for about 10% of Futu’s new users last year, according to an earlier estimate by Daiwa Capital Markets Hong Kong Ltd. Up Fintech had over 20% of its new funded accounts from mainland China in the third quarter last year, according to its Chairman Wu Tianhua. — Bloomberg

Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!



The rapid advancement of digital technologies has gained momentum to a degree that it transformed almost every aspect of modern life. From enhanced and...


Massive construction activities that are ongoing and upcoming across Eastern, Central, and Western Visayas are further driving demand in the region’s construction industry this...


Amidst the picturesque Dole pineapple plantation, SATNET powered by Kacific bridges the connectivity gap. Have you ever wondered how a leading, remote food processing...


US dollar banknotes are seen in this illustration taken July 17, 2022. — REUTERS By Keisha B. Ta-asan, Reporter PHILIPPINE DOLLAR reserves slipped at...


PHILIPPINE STAR/MICHAEL VARCAS By Luisa Maria Jacinta C. Jocson, Reporter THE PHILIPPINE ECONOMY is likely to grow by 6% this year amid strong domestic...


By Kyle Aristophere T. Atienza, Reporter ECONOMISTS are worried about the alleged failure of Philippine lawmakers to take into account the health of state-owned...

You May Also Like


COVID-19 has had a significant impact on the mental health of Filipinos across different groups all over the archipelago. From frontline workers, parents balancing...


REUTERS By Luz Wendy T. Noble, Reporter The country’s foreign exchange buffers slightly increased as of end-October as the value of the central bank’s...


BW FILE PHOTO GROSS BORROWINGS by the National Government reached P2.6 trillion as of end-September as it continued to raise funds to respond to...


KARASOLAR.COM TENA, Ecuador — Ecuador’s rainforest Achuar people say their ancestors long dreamed of a “fire canoe” or “electric fish” that would let them...

Disclaimer: Respect, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2022 Respect Investment. All Rights Reserved.