China's Securities Regulatory Commission (CSRC) is moving to confiscate all illegal gains from Tiger Brokers, Futu Securities, and Longbridge Securities, including the entities' domestic and overseas subsidiaries, and impose severe penalties, according to Xinhua News Agency. The three brokerages are accused of conducting cross-border securities businesses without regulatory approval, violating Chinese securities and futures laws. This marks a major escalation from the 2022 ban on new account openings, shifting from "curbing increments" to "liquidating stock"—and Longbridge faces a public naming for the first time.
All Three Named, Longbridge Enters the List
Futu Holdings, backed by Tencent, is one of Asia's largest online brokerages. Tiger Brokers' parent UP Fintech, invested by Interactive Brokers and Xiaomi, has its New Zealand subsidiary explicitly listed in the penalty notice. Longbridge Securities, also with Xiaomi ties, had escaped public scrutiny in previous crackdowns but now lands directly on the confiscation list.
The common issue: all three used Hong Kong or overseas licenses to offer US and Hong Kong stock trading channels to mainland Chinese investors via the internet, without CSRC approval, deemed illegal securities operations.
Three-Year Escalation Timeline
In October 2021, the CSRC first signaled via state media that cross-border operations were illegal. In November that year, regulators summoned Futu and Tiger executives. On December 30, 2022, the CSRC ordered "effective curbing of increments and orderly resolution of stock", banning new accounts but allowing existing customers to continue trading. In 2023, Futu and Tiger removed their apps from Chinese app stores, pivoting to overseas markets.
The current "proposed decision" wording indicates the CSRC has entered formal administrative penalty proceedings. The scope extends beyond mainland subsidiaries to entities in Hong Kong and New Zealand, signaling that offshore structures are no longer safe. Longbridge's inclusion widens the net. In 2022, Futu and Tiger shares each tumbled about 30% in pre-market trading after the initial ban. Now, the rules are far tougher: not only are new accounts blocked, but past profits must be fully disgorged. It remains unclear whether existing client trading rights will be affected, but the confiscation order could lead to massive fines or business contraction for the brokerages.