China regulator fines brokers for illegal offshore stock trading

The China Securities Regulatory Commission (CSRC) imposed heavy fines on three brokerages—Futu Securities International (1.85 billion yuan), Tiger Brokers (411 million yuan) and Long Bridge Securities—for offering mainland investors unlicensed access to overseas stock markets. Gains from the illicit trades were confiscated and the firms were barred from buying new stocks for two years, though they may continue selling.

The crackdown, coordinated with the People’s Bank, the cybersecurity regulator and five other agencies, targets illegal cross‑border trading that threatens capital controls. Hong Kong’s Securities and Futures Commission also tightened scrutiny of account openings and documentation to prevent misuse of the Stock Connect route. Regulators estimate that mainland investors hold about HK$250 billion (US$31.9 billion) in offshore brokerage accounts, underscoring the scale of demand for foreign equities and the authorities’ push to channel investments through approved channels.

The enforcement aims to preserve financial stability, curb capital outflows and protect investors, while signalling Beijing’s resolve to enforce stricter oversight of offshore brokerage activity.