Chinese brokerages pressured to end overseas investing services

Chinese brokerages offering overseas investing services to mainland clients have come under pressure from a regulatory push that seeks to seal off one of the few remaining loopholes in the country’s strict capital controls.

March 3, 2023 . 1:29 PM

1 min read

Chinese brokerages offering overseas investing services to mainland clients have come under pressure from a regulatory push that seeks to seal off one of the few remaining loopholes in the country’s strict capital controls.
A new regulation coming into force this week from the China Securities Regulatory Commission reiterates the need to prevent “illegal cross-border securities businesses”, building on a multiyear initiative to clamp down on such services.
Chinese citizens are allowed to convert the renminbi equivalent of $50,000 into foreign currencies each year, but the money cannot be invested and should instead be spent on purposes such as travel or education.
Various loopholes, including purchases of insurance policies in Hong Kong and small transfers using friends’ foreign exchange quotas, have been used to circumvent the rules.
Tiger Brokers said in a statement that it strictly abided by relevant laws and regulations, adding that it was actively co-operating with regulators and would take “corrective measures to stop enrolling new onshore customers” in mainland China, though it would continue to “offer legitimate services to existing onshore customers”.