China Bans Tiger, Futu, and Changqiao for Illegal Cross-Border Stock Trading

TLDR:

• The CSRC and eight departments launched a two-year plan to eliminate illegal cross-border brokerage services in China.
• Tiger Brokers, Futu Securities, and Changqiao Securities face full confiscation of illegal gains under Chinese securities law.
• Existing investors can only sell holdings during the rectification period; new buy transactions are fully prohibited by regulators.
• Legal channels like Hong Kong Stock Connect and QDII remain open, ensuring domestic investors retain access to overseas markets.

China’s securities regulator has moved against Tiger Brokers, Futu Securities, and Changqiao Securities for illegal cross-border trading activities.

The China Securities Regulatory Commission confirmed penalties on May 22, 2026. All illegal gains from domestic and overseas entities will be confiscated.

A two-year rectification period has been set. Legal investment channels remain open to domestic investors throughout this process.

CSRC Issues Joint Plan With Eight Other Departments

The CSRC, alongside eight other government departments, released a comprehensive rectification plan. It was approved by the State Council before being formally issued.

The plan targets unauthorized securities, futures, and fund services offered to mainland Chinese investors. These platforms operated without proper regulatory approval inside China.

Tiger Brokers (NZ), Futu Securities (HK), and Changqiao Securities (HK) face severe penalties under existing laws. The CSRC cited violations of China’s securities, fund, and futures regulations.

Their activities were described as disrupting the order of China’s financial markets. Both domestic and overseas entities under each firm are subject to enforcement.

During the two-year rectification window, overseas institutions face strict transaction limits. They are permitted only to process one-way sell transactions for existing investors. Buying transactions and new fund transfers into China are prohibited.

A relevant CSRC official stated that the plan “clarifies many measures to protect the legitimate rights and interests of existing investors.” After the period ends, all domestic websites, apps, and servers must be fully shut down.

The CSRC first clarified the illegality of such cross-border activities on December 30, 2022. At that time, incremental illegal business activities were banned, and new account openings were prohibited.

However, the latest action goes further with a structured exit plan. This marks a more decisive phase in China’s regulatory approach to offshore brokerages.

Investor Protections and Legal Channels Remain Intact

A key concern among market participants is whether existing investors will lose access to their assets. The CSRC has confirmed that investor property safety will not be affected by the rectification.

Overseas institutions are required to “communicate and coordinate with investors affected by the rectification measures in China and arrange account dispositions,” according to the plan. This ensures that assets are handled properly before services are fully withdrawn.

Investors have also questioned whether access to Hong Kong stocks will be cut off. Officials clarified that this action targets only illegal cross-border business activities.

Legal investment routes such as Hong Kong Stock Connect, QDII, and Cross-border Wealth Management Connect remain fully operational. Domestic investors can continue using these approved channels without disruption.

Market participants noted that the rectification “will not affect existing legal channels,” reinforcing confidence among retail investors.

Overseas institutions are also allowed to continue serving Chinese investors physically located outside mainland China.

This distinction limits the broader market effect of the crackdown. The phased approach gives investors adequate time to adjust their positions.

The rectification is expected to reshape how Chinese retail investors access foreign equities. Centralized exchanges and on-chain US stock trading platforms may see increased interest as a result.

The removal of offshore brokerages from the domestic market creates a visible gap. Regulated alternatives are likely to attract attention in the months ahead.

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