China bans securities firms from attracting new clients for offshore stock trading

On the 12th (local time), major foreign media reported that China has, for the first time, banned its domestic securities firms and overseas affiliates from attracting new mainland customers for offshore stock trading.

According to the reports, the China Securities Regulatory Commission (CSRC) issued a notice on the 28th of last month to domestic securities firms, instructing them to stop attracting new mainland customers for offshore stock trading through offshore accounts such as those in Hong Kong.

[Image source=Yonhap News]

Additionally, the notice stated that new investments by existing mainland customers will be "strictly monitored" to prevent circumvention of China's foreign exchange controls. Activities considered illegal include cross-border securities brokerage, securities lending, fund sales, and investment consulting. The media added that multiple sources have confirmed the contents of the notice.

China is concerned about capital outflows amid a weakening yuan caused by a slowdown in growth. Earlier, in May, China identified securities trading applications UP (Xiaomi) and Futu (Tencent) as being illegally operated by enabling Chinese investors to trade offshore stocks. Both apps have been removed from Chinese app stores.

This content was produced with the assistance of AI translation services.