The China Securities Regulatory Commission (CSRC) announced on May 22 that it has initiated investigations and issued pre-administrative penalty notices against Tiger Brokers (NZ) Limited (Tiger Brokers), Futu Securities International (Hong Kong) Limited (Futu), and Longbridge Securities (Hong Kong) Limited (Longbridge), along with their related domestic and overseas entities, for illegally conducting securities business in mainland China. The preliminary decision is to confiscate all illegal gains from the three institutions' related entities and impose severe penalties according to law.
On the evening of May 22, Futu Holdings Limited, the parent company of Futu Securities, announced that it had received an investigation notice and a pre-notice of administrative penalty from the CSRC and its Shenzhen branch. The proposed fine against the company amounts to 1.85 billion Chinese yuan (approximately $271 million). Additionally, a personal fine of 1.25 million yuan (approximately $183,575) was proposed against Li Hua, the founder and CEO of Futu.
Tiger Brokers announced on May 22 that the Beijing Regulatory Bureau of the CSRC has imposed administrative fines totaling approximately 308.1 million yuan on its relevant subsidiaries and confiscated illegal gains totaling about 103.1 million yuan. The combined penalty and confiscation amount to 411.2 million yuan.
Furthermore, Wu Tianhua, a director and the CEO of Tiger Brokers, received a warning and was fined 1.25 million yuan.
When U.S. stock markets opened on May 22, shares of Tiger Brokers fell approximately 31%, while shares of Futu Holdings dropped about 35%. Both stocks had declined over 30% in pre-market trading.
According to the announcement from Futu Holdings, the CSRC stated that certain Futu entities in mainland China and Hong Kong (the "related companies") had engaged in securities business, public fund sales, and futures business in mainland China without obtaining the required licenses or approvals, violating the Securities Law, Securities Investment Fund Law, and the Futures and Derivatives Law of the People's Republic of China. The CSRC intends to order the relevant companies to correct or cease such activities, confiscate the illegal proceeds, and impose fines, with a total proposed fine of approximately 1.85 billion yuan.
The announcement from Futu Holdings also noted that the proposed penalties are still subject to further procedures and the final decision of the CSRC.
Tiger Brokers announced that several of its subsidiaries received notices from the Beijing Regulatory Bureau of the CSRC. The notices indicated that the bureau had initiated an investigation into the subsidiaries' suspected illegal engagement in securities, fund, and futures business, determining that these subsidiaries had conducted unlicensed cross-border securities business in mainland China, along with illegal activities involving fund and futures business. Based on the investigation findings, the Beijing bureau imposed administrative fines totaling about 308.1 million yuan on the relevant subsidiaries and confiscated illegal gains totaling approximately 103.1 million yuan.
As of the end of 2025, the assets of retail clients in mainland China within Tiger Brokers' consolidated financial statements accounted for about 10% of the company's total client assets. The company stated it sincerely accepts the penalty decision, is fully cooperating with the regulatory work, and will strictly implement all required rectification measures. Tiger Brokers emphasized its continued commitment to fulfilling its obligations as an online brokerage and complying with all applicable laws and regulations.
After the close of A-share trading on May 22, the CSRC, jointly with eight other ministries and commissions, issued a notice on standardizing cross-border securities, futures, and fund business activities for mainland investors, further clarifying regulatory requirements for related industry activities. Simultaneously, the CSRC announced it would seriously investigate and handle cases of illegal cross-border business operations by institutions such as Tiger Brokers.
The CSRC stated that the related domestic and overseas entities of Tiger Brokers, Futu, and Longbridge, without its approval and lacking licenses for securities brokerage business or securities margin trading business, had conducted marketing, promotion, and transaction instruction processing for securities trading in mainland China, obtaining related income. This violated provisions such as the Securities Law, constituting illegal operation of securities business, illegal engagement in public fund sales, and illegal futures brokerage activities.
The CSRC emphasized that such illegal cross-border business activities violate China's securities, fund, and futures laws and regulations, disrupt market order, and must be resolutely combated. The preliminary decision is to confiscate all illegal gains from the related entities of Tiger Brokers, Futu, and Longbridge and impose severe penalties according to law. The parties involved have the right to make statements, defend themselves, and request hearings regarding the proposed administrative penalties. The CSRC will make a final administrative penalty decision after fully considering the parties' opinions.
The next step involves the CSRC continuing to resolutely implement regulatory requirements to crack down on illegal securities business activities by overseas institutions in mainland China, safeguarding capital market order and stability.
The Hong Kong Securities and Futures Commission (SFC) issued a circular on the same day, outlining control measures to be implemented when opening accounts and maintaining client relationships. This circular followed the SFC's review of the account opening practices of 12 securities brokerage firms.
The SFC noted that the review identified several significant deficiencies, including insufficient due diligence on account opening documents, acceptance of suspicious or forged documents during account opening, and weaknesses in managing cross-border agency relationships with overseas intermediaries. The SFC requires all licensed corporations to conduct internal checks as soon as practicable to detect whether any suspicious or forged documents have been accepted for account opening.
In response to regulatory statements earlier that day, Tiger Brokers stated it had noted the relevant notice and would strictly cooperate with the regulatory work as required. The company affirmed that all its operations are currently normal. Tiger Brokers emphasized that compliance is its top priority and that it maintains close communication with regulators.
Tiger Brokers stated that since 2023, the company has completely stopped opening accounts for users with mainland Chinese identities, simultaneously ceasing external advertising, marketing promotions, and activities, while continuously strengthening account review, identity verification, and anti-fraud management mechanisms. As of the end of the first quarter of 2026, assets from mainland Chinese clients accounted for about 10% of the group's global total assets.
Tiger Brokers affirmed that its global business operations are currently normal, and its financial condition is robust. The company stated it will strictly follow the industry-wide regulatory requirements issued by authorities and steadily advance related compliance work.
Futu responded that the CSRC and the Hong Kong SFC issued notices on May 22, 2026, providing updated guidance for the entire industry regarding cross-border securities, futures, and fund business activities for mainland investors. Futu actively embraces and responds to the guidance direction of regulators in both regions. These guidelines and standards are unified requirements for the entire industry, and Futu will strictly follow regulatory requirements to steadily advance related compliance work.
Futu stated that regarding new service requirements from regulators for existing mainland clients, it will strictly adhere to the latest regulatory guidance while also referring to the operational practices of other major domestic and foreign securities firms and banks in the industry. This is to assist existing mainland investors in orderly and proper responses, safeguarding client asset safety and maintaining stable market order. Currently, specific regulatory details are not fully clarified, so a detailed timeline and specific plan cannot be provided. Once the details are finalized, specific arrangements will be announced and relevant clients notified promptly.
According to Futu, it had previously completely stopped opening accounts for applicants with mainland identities and has continued efforts to combat fraudulent account openings, maintaining zero tolerance for fraud and continuously introducing new technological solutions to improve effectiveness. Over the past two years, Futu has rejected tens of thousands of account opening applications that did not comply with rules. The company has consistently actively communicated with regulators and followed their rectification requirements. As of the end of the first quarter of 2026, the proportion of mainland Chinese clients with assets to the total number of clients with assets in the entire group had decreased to 13%.
Futu stated that its business operations are currently normal. The company will continue to adhere to the concept of compliant operations, provide high-quality services to clients within the framework of relevant laws and regulations in the countries/regions where it operates, and steadily advance the development of various businesses.
Looking back at the severe crackdown on illegal cross-border business operations, signs were evident as early as December 30, 2022. At that time, the CSRC issued a notice requiring Futu and Tiger Brokers to conduct rectifications. The CSRC stated that Futu and Tiger Brokers, without CSRC approval, had engaged in cross-border securities business targeting mainland investors. According to relevant laws and regulations such as the Securities Law, their actions constituted illegal operation of securities business.
On January 13, 2023, the CSRC issued the Measures for the Administration of Securities Brokerage Business. Article 46 clarifies that if overseas securities business institutions violate regulations by directly or through their affiliated or cooperative institutions conducting marketing, account opening, and other activities for overseas securities trading services within mainland China, penalties will be imposed according to the Securities Law. Rectification and standardization work will be steadily advanced following the principle of "effectively curbing incremental issues and orderly resolving existing ones."
On February 15, 2023, a spokesperson for the CSRC responded to media inquiries regarding the rectification of illegal cross-border business operations by overseas licensed institutions. Since December 30, 2022, the CSRC has been promoting the rectification of illegal cross-border business operations by Futu and Tiger Brokers according to law. The core requirement is to prohibit overseas institutions not licensed in mainland China from illegally soliciting mainland investors and opening new accounts for them. Meanwhile, existing mainland investors are still allowed to continue trading through the original overseas institutions, but when transferring incremental funds to overseas accounts, existing investors must strictly comply with China's foreign exchange management regulations.
On May 16, 2023, Futu announced on its official website that, in response to the CSRC's industry rectification requirements for standardizing cross-border securities business, it planned to remove the Futu Niu Niu App from online application stores in mainland China starting May 19, 2023, to promote full compliance with mainland regulatory principles.
Futu stated that existing mainland clients could still trade through the Futu Niu Niu App, with related services and businesses unaffected. Downloading and using the Futu Niu Niu App by Hong Kong and all overseas users remained unaffected.
On the same day, Tiger Brokers also announced that, according to the CSRC's rectification requirements for cross-border securities business, to complete rectification work with high quality, the company adjusted the method for mainland users to update the client application, removing the Tiger International App from mainland application markets starting May 18, 2023. Tiger Brokers stated that this adjustment did not affect existing clients' normal use of the Tiger International App. For new users, Tiger Brokers had stopped accepting account opening applications from mainland Chinese users since 00:00 on December 31, 2022.
In terms of financial performance, both listed cross-border internet brokerages have shown strong results.
The 2025 financial report shows that Tiger Brokers achieved annual revenue of $612 million, a year-on-year increase of 56.3%. The annual non-GAAP net profit attributable to the parent company reached $187 million, a year-on-year increase of 164.7%, both setting historical records. As of the end of 2025, according to its financial report, Futu Holdings' total revenue reached $2.935 billion, a year-on-year increase of 68.1%. Under non-GAAP, the net profit was $1.496 billion, a year-on-year increase of 101.9%.
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