China Cracks Down on Online Trading for Mainland Investors

Trading firm Tiger Brokers announced it will prohibit mainland Chinese investors from increasing their positions from June 12 if they are physically located within mainland China. This measure is in direct response to a directive from Chinese authorities, who have informed Tiger, Futu, and Longbridge that such accounts are illegal under stricter regulations implemented on May 27. Tiger clarified that investors can still buy or sell securities from their existing accounts while traveling offshore.

Futu's CEO indicated that mainland investors would face restrictions on new deposits and security purchases, though the exact implementation date was not specified. Futu has ceased opening new accounts for individuals holding mainland Chinese identification, a customer segment that constituted 13% of its user base at the close of the first quarter. China's regulator has reportedly granted a two-year grace period for these firms to cease illegal activities.