Overview
- China’s securities regulator has opened formal investigations and issued advance penalty notices against Futu Securities International, Tiger Brokers (NZ) and Longbridge for operating without mainland licences.
- The agencies proposed confiscating all illegal gains and significant fines, with Futu disclosing a proposed penalty of about RMB1.85 billion and a proposed personal fine for its CEO.
- A State‑Council‑approved joint plan creates a two‑year rectification window that bars new mainland deposits and buy orders and limits existing mainland accounts to sell‑only activity during the wind‑down.
- The May 22, 2026 announcement triggered steep pre‑market falls of roughly 30–40% in US‑listed parent stocks of the targeted brokers and produced knock‑on weakness in other US‑listed Chinese ADRs.
- The crackdown reinforces China’s capital‑flow controls, pushes retail investors toward legal routes such as Stock Connect and QDII funds, and is likely to reshape how mainland clients gain overseas equity exposure over the coming months.