#TradFi交易分享挑战

A 40% plunge! The three major brokerage giants heavily fined—what's their background?

01

Eight ministries jointly take action, illegal cross-border brokerages face the strongest regulation

This rectification campaign has drawn a clear regulatory red line, explicitly prohibiting all foreign institutions from engaging in securities, futures, and fund business marketing, account opening, transaction instruction processing, fund transfers, and other operational services within the country. It also strictly bans domestic entities from assisting foreign institutions in illegal operations, such as website setup, trading software development and operation, customer service, and other support.

To maximally protect the legitimate property rights of existing investors, this plan sets a two-year concentrated rectification transition period, providing investors with ample buffer time.

During the rectification period, accounts already opened by investors will not be forcibly canceled, and assets such as funds, stocks, and funds within the accounts will not be forcibly cleared. However, the accounts will only support one-way sell transactions and fund transfers, with new buy-ins and fund inflows prohibited.

After the two-year rectification period, the three foreign institutions must fully shut down their domestic websites, trading software, and all supporting services, completely ending all trading services for domestic investors.

Regarding the specific criteria for defining existing clients, Phoenix Finance learned from industry insiders that all investors who have opened accounts in mainland China are considered existing.

This major rectification is not a temporary regulatory move but a comprehensive upgrade of domestic financial compliance governance.

In fact, as early as December 2022, the China Securities Regulatory Commission (CSRC) clarified that foreign institutions operating cross-border without qualification are illegal, halting new account openings by firms like Tiger and Futu, and banning them from soliciting new domestic clients.

By 2025, some foreign brokerages were found to be circumventing regulations and engaging in illegal operations, prompting regulatory authorities to initiate special rectification supervision.

This joint plan by eight ministries establishes a long-term, multi-department coordinated regulatory mechanism, marking the beginning of a full-chain, normalized, and all-encompassing crackdown on illegal cross-border securities activities. It also signifies that the era of rapid, low-threshold growth of the three leading cross-border brokerages, which relied on internet advantages to capture the domestic Hong Kong and U.S. stock retail market, has come to an end, with domestic operations to be terminated.

Regulatory authorities are also guiding domestic investors to abandon illegal investment channels and participate in overseas investments through compliant channels such as Stock Connect, QDII, and Cross-border Wealth Management Connect.

02

Futu, Tiger, Changqiao—what's their background?

The three institutions heavily penalized this time—Futu, Tiger, and Changqiao—are currently the largest and highest-volume internet brokerages for Hong Kong and U.S. stocks among domestic users.

The core reason for the penalties is that these three firms did not obtain licenses for securities brokerage and securities margin trading, and engaged in securities trading marketing, transaction instruction processing, and other related securities services within the country to earn related profits, violating Article 120 of the Securities Law, constituting illegal securities business operations.

Additionally, related domestic and foreign entities of these three firms also violated Article 97 of the Securities Investment Fund Law and Article 63 of the Futures and Derivatives Law, constituting illegal public fund sales and illegal futures brokerage activities.

Notably, all three brokerages are backed by major domestic internet giants, with close capital and ecological ties to Tencent, Xiaomi, and Alibaba respectively.

Futu Securities is officially known as Futu Securities International (Hong Kong) Limited, with its parent company Futu Holdings listed on NASDAQ. It was founded by early core employees of Tencent, with Tencent as its key strategic shareholder. It is an important platform for Tencent’s overseas securities business, relying on its Shenzhen subsidiary to implement various domestic supporting services. As of the latest financial report, Tencent still holds a 20% stake in Futu.

Tiger Securities is operated by Tiger Securities (New Zealand) Limited, also NASDAQ-listed, founded by core members of NetEase Youdao’s technical team. Xiaomi Group is a significant investor, and before its IPO, Xiaomi held 14.1% of Tiger Securities.

Leveraging Xiaomi’s ecosystem capital and traffic, the company conducts domestic marketing, software operations, and transaction processing through its Beijing subsidiary.

In terms of scale, Futu is the absolute leader among the three. Its total revenue for 2025 reached HKD 22.85B (about USD 2.9 billion), a 68.1% year-over-year increase; it has 29.18 million registered users, with 3.37 million asset clients; total annual trading volume reached HKD 14.68 trillion (about RMB 13.56 trillion), up 89.4% year-over-year.

Tiger Securities and Changqiao Securities follow closely. Tiger Securities’ total revenue for 2025 is USD 612 million, with a net profit attributable to shareholders of USD 171 million, over 1.25 million asset clients, with client assets totaling about USD 60.8 billion, and total annual trading volume reaching USD 1.03 trillion (about RMB 7.04 trillion).

Changqiao Securities is characterized by rapid growth, with a nominal trading volume of USD 1.5 trillion (about RMB 10.26 trillion) in 2025, completing 55.7 million orders throughout the year, ranking first among emerging cross-border brokerages in Hong Kong stocks.

This joint crackdown by eight ministries on illegal cross-border securities activities is an inevitable upgrade of domestic financial regulation compliance and normalization, also announcing the end of the wild growth era for internet cross-border brokerages like Futu, Tiger, and Changqiao. $FUTU