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Post by : Shakul
China has launched a major crackdown on what authorities described as illegal cross-border securities activities, intensifying its efforts to tighten control over capital outflows and overseas investment operations.
The China Securities Regulatory Commission announced the campaign alongside several other government agencies, including the central bank. Regulators said the operation specifically targets overseas brokerage firms and their local partners accused of operating in mainland China without proper approval.
Chinese authorities stated that online brokerage platforms including Tiger Brokers, Futu Holdings and Longbridge allegedly solicited mainland Chinese investors without obtaining required domestic licenses. Regulators said penalties would include confiscation of illegal gains, although no financial details were disclosed.
Under the new measures, affected firms have reportedly been granted a two-year transition period to wind down unauthorized activities. During this period, existing customers will only be allowed to sell current holdings and withdraw funds, while no new investments or account expansions will be permitted.
The announcement triggered sharp reactions in financial markets. Shares of major Chinese-linked brokerage firms fell heavily in pre-market trading in the United States. Technology giants including Alibaba and PDD Holdings also recorded declines amid investor concerns over stricter financial regulations and reduced trading activity.
Chinese regulators said the campaign aims to protect the healthy development of capital markets and ensure outbound investments are conducted through legal and supervised channels. Authorities have maintained strict controls on capital movement for years as part of broader financial stability measures.
In Hong Kong, the Securities and Futures Commission also revealed that inspections of multiple brokerage firms uncovered significant operational deficiencies. The regulator instructed brokers to close suspicious accounts and strengthen identity verification and funding source checks for new clients.
Analysts believe the crackdown may temporarily reduce speculative investment activity linked to Hong Kong and overseas stock markets. Experts also noted that the measures reflect Beijing’s continuing effort to strengthen oversight of financial flows during a period of economic uncertainty and global market volatility.
The move comes at a time when China is facing increasing pressure from slower economic growth, geopolitical tensions and concerns over financial stability. Market observers expect tighter supervision of digital trading platforms and foreign investment channels in the coming months.
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