Friday , March 31 2023

Chinese online brokers Futu and UP Fintech face regulatory risks – People Daily website


Chinese online brokers Futu Holding (FUTU.O) and UP Fintech Holding, which are registered in the United States, face regulatory risks due to the entry into force of China’s new privacy law, according to an analysis by the official People Daily newspaper. on the website.

The article says that information that helps mainland Chinese invest in foreign stock markets such as the United States and Hong Kong could violate privacy rules and also create compliance risks.

China has taken a number of steps targeting sectors ranging from technology to cryptocurrency to property. An article by People Daily may add Chinese online brokers to the list of regulators.

China will implement the Personal Data Protection Act, which complements the Information Security Law, which regulates cyberspace and protects national security, from November 1.

According to the People’s Newspaper, the new rules will regulate the export of personal data and create problems for online brokers providing cross-border trading services to citizens of mainland China.

Brokers such as Futu and UP Fintech do not have a brokerage license on the mainland, but Chinese citizens can open an online account after providing personal information such as ID cards, bank cards and tax records. gathered, where is it going? “

The article says that online brokers, including Snowball Securities, also face business compatibility risks.

Currently, Chinese investors can invest in foreign securities markets through cross-border communication schemes and Qalai Local Institutional Investors (QDII).

According to People Daily, apart from these two channels, the Chinese securities regulator has not allowed any institution to provide cross-border trade services to local investors.

Interviews by Samuel Shen and Emily Chow Edited by Toby Chopra and Mark Potter

Our Standards: Thomson Reuters Principles of Trust.

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