HONG KONG – Tiger Brokers will bar China-based investors from adding to their positions from June 12 when they are physically on the Chinese mainland, the trading firm said in a notice to clients on June 2.
China had told Tiger and other online brokers Futu and Longbridge Securities to wind down such accounts, which it says are illegal under new tighter regulations introduced on May 27. The crackdown on illicit cross-border trading is part of Beijing’s drive to prevent capital outflows.
The three brokerages have Singapore entities – Tiger Brokers (Singapore), Long Bridge Securities and Moomoo Financial Singapore (for Futu) – but these are “financially independent” from related group entities in Hong Kong and other jurisdictions that have come under regulatory action, the Monetary Authority of Singapore (MAS) said last week.
Tiger’s announcement marks one of the first concrete steps by the brokerage firms to comply with Beijing’s tougher rules.
Tiger said in its notice that investors will still be able to buy or sell securities from the existing accounts when they travel offshore.
Futu’s chief executive said during an earnings call last week that mainland investors will be restricted from making new deposits or purchasing new securities, though he did not say when the measure would come into effect.
Futu has stopped opening new accounts for mainland Chinese identity holders. At the end of the first quarter, mainland investors accounted for 13% of its customer base.
The firms would be given a two-year grace period to wind down illegal activities, the Chinese regulator said in May.
MAS also said last week that it is following up with the three Singapore-licensed entities to reinforce its expectations of conduct and compliance. REUTERS
