Futu and Up Fintech to remove their apps from online stores in mainland China -...

Futu and Up Fintech to remove their apps from online stores in mainland China

Futu and Up Fintech to remove their apps from online stores in mainland China

12 hours ago

Online brokerages Futu Holdings and Up Fintech Holding on Tuesday said they’ll remove their apps from online stores on the Chinese mainland in response to “rectification requirements” from the Chinese Securities Regulatory Commission.

Tencent-backed Futu will have its app removed by May 19, and Xiaomi-backed Up Fintech said it will remove its app by May 18.

Both companies said existing mainland Chinese customers will still be able to trade using the apps.

The two Chinese firms stopped accepting mainland Chinese clients late last year after the China Securities Regulatory Commission (CSRC) said their cross-border securities business violated the law by serving domestic investors without the regulator's consent.

Back in October 2021, CSRC made an official statement that the two brokerages' operations were not in compliance with the laws and that they would be subject to regulation. In November of that year, the regulator summoned executives at Futu and UP Fintech, asking them to regulate cross-border securities trading business for domestic investors in accordance with the law.

Futu and UP Fintech hold licenses in Hong Kong, Singapore, and the US, but not yet in mainland China. Currently, no mainland license exists for online brokerages specializing in cross-border trades.

Chinese mainland investors are typically limited to investing in foreign securities through two regulated schemes: the Qualified Domestic Institutional Investor (QDII) and the connect scheme linking the Hong Kong and mainland stock markets. Both schemes are tightly regulated, have relatively high barriers to entry and offer limited services.

This is why Futu and UP Fintech have gained popularity among mainland individual investors looking to invest in overseas stock markets, as they offer more services, lower capital thresholds and fewer restrictions. Chinese mainland citizens can open an account online after submitting personal information related to their ID card and bank card.

Following the announcement, shares of Nasdaq-listed Futu Holdings and Up Fintech slumped.

SHARE