The China Securities Regulatory Commission announced that it would launch an investigation into the domestic and overseas related entities of Tiger, Futu and Changqiao Securities for illegally operating securities businesses in the country in accordance with the law, and issue administrative penalties in advance. It plans to decide to confiscate all illegal income of the domestic and overseas related entities of the three institutions, and severely punish them in accordance with the law. The China Securities Regulatory Commission said that the parties have the right to make statements, pleas and request hearings. The authorities will make administrative penalty decisions in accordance with the law after fully listening to the opinions of the parties.
A press release from the China Securities Regulatory Commission pointed out that the relevant domestic and overseas entities of three securities companies carried out securities transaction marketing and promotion, processing transaction orders and other related securities business services in the country and obtained profits without the approval of the authorities and relevant licenses, which violated the provisions of the securities law and constituted illegal securities business operations. The three securities companies also violated the provisions of the Securities Investment Fund Law, the Futures and Derivatives Law, and illegally engaged in the sales business of public funds and illegally engaged in the futures brokerage business.
The China Securities Regulatory Commission stated that relevant illegal cross-border business expansion activities undermine market order and must be resolutely cracked down. The next step will be to continue to resolutely implement the "thorny" and angular requirements of supervision, severely crack down on illegal activities such as overseas institutions illegally operating securities businesses within the country, and make every effort to maintain the order and stability of the capital market.
In addition, eight departments including the China Securities Regulatory Commission jointly issued the "Implementation Plan for Comprehensive Rectification of Illegal Cross-Border Securities and Futures Fund Business Activities", which clarified that illegal cross-border business activities of overseas securities and futures fund business institutions will be completely banned after two years of concentrated rectification.
Xinhua News Agency reported that according to the plan, a two-year centralized rectification period will be set up to clean up illegal existing businesses. During the centralized rectification period, foreign institutions are prohibited from illegally providing services such as buying transactions and transferring funds to existing investors within the country, and only one-way selling transactions and transferring funds are allowed. After the expiration of the centralized rectification period, overseas institutions must completely shut down domestic websites, trading software and supporting servers, and are prohibited from illegally providing trading and other services to existing investors in the country.
The plan emphasizes that the safety of investors' property will not be affected by the rectification. It also states that this rectification targets illegal cross-border business development activities of overseas institutions and will not affect existing legal channels.