On May 22, the China Securities Regulatory Commission (CSRC) announced that it has initiated an investigation and pre-penalty notice against Tiger Brokers (NZ) Limited (hereinafter referred to as "Tiger Securities"), Futu Securities International (Hong Kong) Limited (hereinafter referred to as "Futu"), and Changqiao Securities (Hong Kong) Limited (hereinafter referred to as "Changqiao") for illegal securities operations in and out of the country. They plan to confiscate all illegal gains from these entities and impose severe penalties under the law.
On the evening of May 22, Futu Securities' parent company, Futu Holdings, announced that it received an investigation notice and administrative penalty pre-notification letter from the CSRC and its Shenzhen branch (collectively referred to as "CSRC"). They intend to impose a fine of 1.85 billion RMB (approximately $271 million) on the company. Additionally, Futu's founder and CEO, Li Hua, is facing a personal fine of 1.25 million RMB (about $183,575).
On May 22, Tiger Brokers announced that the Beijing Securities Regulatory Bureau imposed a total administrative fine of approximately 308.1 million yuan on the company's relevant subsidiaries and confiscated a total of approximately 103.1 million yuan in illegal gains. The total amount of fines and confiscations was 411.2 million yuan.
In addition, Tiger Brokers' director and CEO Wu Tianhua also received a warning and was fined 1.25 million yuan.
On May 22, the US stock market opened with Tiger Brokers down about 31% and Futu Holdings down about 35%. Both Tiger Brokers and Futu Holdings saw their pre-market share prices drop over 30%.
Tiger Brokers and Futu both announced the amount of the fines.
According to the announcement made by Futu Holdings, the parent company of Futu Securities, the CSRC pointed out that certain Futu entities in mainland China and Hong Kong ("affiliated companies") conducted securities business, public fund sales, and futures business in mainland China without obtaining the necessary licenses or approvals, violating the (Securities Law), (Securities Investment Fund Law), and (People's Republic of China Futures and Derivatives Law). The CSRC intends to order the relevant companies to correct or cease such activities, confiscate illegal gains, and impose fines, with a total proposed fine of approximately 1.85 billion yuan (about $271 million).
In addition, the CSRC intends to impose a personal fine of 1.25 million yuan (approximately $183,575) on Futu's founder and CEO Li Hua. Futu Holdings stated that the proposed fine is still subject to further procedures and the CSRC's final decision.
On May 22, Tiger Brokers announced that several of its subsidiaries received a notice from the China Securities Regulatory Commission's Beijing Regulatory Bureau. The notice indicated that the Beijing Securities Regulatory Bureau has initiated an investigation into the subsidiaries for suspected illegal engagement in securities, fund, and futures business activities, and determined that these subsidiaries conducted unlicensed cross-border securities business in mainland China, as well as illegal activities involving fund and futures business. Based on the findings of the investigation, the Beijing Securities Regulatory Bureau imposed a total administrative fine of approximately 308.1 million yuan and confiscated a total of approximately 103.1 million yuan in illegal gains.
In addition, Tiger Brokers' director and CEO Wu Tianhua also received a warning and was fined 1.25 million yuan.
As of the end of 2025, the retail client assets of Tiger Brokers in the consolidated financial statements accounted for approximately 10% of the company's total client assets. The company sincerely accepts the above penalty decision. We are fully cooperating with the regulatory agencies' work and will strictly implement all rectification measures required by the regulators. The company will continue to fulfill its obligations as an online brokerage and strictly comply with all applicable laws and regulations.
Regulatory agencies from both regions have announced strict measures.
After the close of the A-shares on May 22, the CSRC, together with eight ministries, issued a notice (on standardizing mainland investors' cross-border securities, futures, and fund business activities), further clarifying regulatory requirements for relevant industry operations. At the same time, the CSRC announced severe investigations into illegal cross-border operations by institutions like Tiger.
The CSRC stated that Tiger Brokers, Futu, and Changqiao's related entities conducted securities brokerage business, securities margin financing business without the required approvals, and engaged in marketing and processing trading orders for securities trading services in the mainland, violating the (Securities Law) and other provisions, constituting illegal securities business, illegal public fund sales, and illegal futures brokerage.
"The aforementioned illegal cross-border operations violate our securities, fund, and futures laws and regulations, disrupt market order, and must be firmly cracked down on," the CSRC stated. The CSRC plans to confiscate all illegal gains from Tiger Brokers, Futu, and Changqiao's related entities both domestically and abroad, and impose severe penalties according to the law. The parties involved have the right to make statements, defend themselves, and request a hearing regarding the proposed administrative penalties; the CSRC will fully consider the opinions of the parties involved before making a final decision on the administrative penalties.
Going forward, the CSRC will continue to firmly implement regulatory requirements that are 'sharp and pointed,' severely crack down on illegal operations by overseas institutions in the mainland, and strive to maintain the order and stability of the capital market.
The Hong Kong Securities and Futures Commission also issued a circular on the same day, outlining monitoring measures that should be implemented during account opening and maintaining client relationships. This circular was issued after the Hong Kong Securities and Futures Commission reviewed the account opening practices of 12 securities brokerage firms.
The Hong Kong Securities and Futures Commission pointed out that the review identified several significant deficiencies, including insufficient due diligence on account opening documents, acceptance of suspicious or forged documents during the account opening process, and weaknesses in managing cross-border agency relationships with overseas intermediaries. The Hong Kong Securities and Futures Commission requires all licensed entities to conduct internal audits as soon as practicable to detect whether any suspicious or forged documents have been accepted for account opening.
The proportion of funds from Tiger Brokers and Futu's mainland clients has fallen below 13%.
In response to regulatory statements, Tiger Brokers earlier today told The Paper that the company has noted the relevant notice and will strictly comply with regulatory requirements while actively cooperating with related work. Currently, all business operations of the company are normal. Tiger Brokers always prioritizes compliance and maintains close communication with regulatory agencies.
Tiger Brokers stated that since 2023, the company has completely stopped opening accounts for users with domestic identities, simultaneously halting external advertising, marketing promotions, and activities, while continuously strengthening account review, identity verification, and anti-fraud management mechanisms. As of the end of the first quarter of 2026, the assets of domestic customers accounted for approximately 10% of the group's total global assets.
"Currently, Tiger International's global business operations are all normal, and the financial situation is stable," Tiger Brokers stated, emphasizing that they will strictly adhere to the industry-wide regulatory norms issued by regulators and steadily advance related compliance work.
Futu responded to The Paper that the CSRC and the Hong Kong Securities and Futures Commission respectively issued notices on May 22, 2026, updating the guidelines for the entire industry regarding mainland investors' cross-border securities, futures, and fund business activities. Futu actively embraces and responds to the guiding directions of both regulatory agencies. These guidelines and regulations represent unified requirements for the entire industry, and Futu will strictly follow the regulatory agencies' requirements to steadily advance related compliance work.
"In response to the new service requirements for existing domestic clients from the regulatory agency, we will strictly adhere to the latest regulatory guidelines, while also referring to industry practices from other local and foreign large brokerages and banks to assist existing domestic investors in an orderly and proper manner, ensuring the safety of client assets and maintaining stable market order. Currently, the regulatory details are not yet fully clear; we are temporarily unable to provide a detailed timeline and specific plan. Once the details are finalized, we will promptly announce specific arrangements and notify relevant clients," Futu stated.
According to Futu, it has fully stopped opening accounts for domestic identity applicants and continues to work hard to combat fraudulent account openings, maintaining a zero-tolerance policy against fraud, continuously introducing new technological solutions to enhance fraud prevention effectiveness. Over the past two years, Futu has rejected tens of thousands of account applications that did not meet regulations. Futu has always actively communicated with regulatory agencies and followed their rectification requirements. As of the end of the first quarter of 2026, the proportion of asset-holding clients from mainland China to the total number of asset-holding clients in the group has dropped to 13%.
"Currently, the company's business operations are all normal. We will continue to adhere to the compliance business philosophy and provide quality service to clients within the framework of relevant laws and regulations in the countries/regions where we operate, steadily advancing all business development," Futu stated.
Cross-border securities business continues to be regulated.
Looking back at the heavy crackdown on illegal cross-border operations, clues had actually emerged as early as December 30, 2022. At that time, the CSRC issued a notice requiring Futu and Tiger Brokers to rectify their operations. The CSRC stated that Futu and Tiger Brokers conducted cross-border securities business targeting domestic investors without the CSRC's approval, and their actions constituted illegal securities business under the (Securities Law) and other relevant laws and regulations.
On January 13, 2023, the CSRC released the (Securities Brokerage Business Management Measures), which clearly states that if overseas securities operating institutions violate regulations by directly or through their affiliated or cooperative institutions engaging in marketing, account opening, and other activities for overseas securities trading services in the mainland, they will be punished according to the (Securities Law) and the rectification and regulatory work will be steadily advanced with the idea of 'effectively curbing increments and orderly resolving existing issues.'
On February 15, 2023, a spokesperson for the China Securities Regulatory Commission (CSRC) responded to reporters regarding the rectification of illegal cross-border operations by overseas licensed institutions. Since December 30, 2022, the CSRC has been legally promoting the rectification of illegal cross-border operations by Futu and Tiger Brokers. The core requirement is to prohibit unlicensed overseas institutions from soliciting domestic investors and opening new accounts for them; however, existing domestic investors are still allowed to continue trading through original overseas institutions, but must strictly comply with China's foreign exchange management regulations when transferring additional funds to overseas accounts.
On May 16, 2023, Futu announced on its official website that in response to the CSRC's regulatory requirements for standardizing cross-border securities business, it plans to remove the Futu NiuNiu app from online app stores within China starting May 19, 2023, to ensure the business fully complies with the regulatory spirit in China.
Futu stated that existing domestic clients can still trade through the Futu NiuNiu app, and related services and operations remain unaffected. Users from Hong Kong and all overseas users can download and use the Futu NiuNiu app without any impact.
On the same day, Tiger Brokers also announced that in accordance with the CSRC's requirements for rectifying cross-border securities business, to ensure high-quality completion of the rectification work, the company will adjust the way domestic users update their clients starting May 18, 2023, by removing the Tiger International app from domestic app stores. Tiger Brokers stated that this adjustment does not affect existing customers' normal use of the Tiger International app. For new users, Tiger Brokers has ceased accepting account applications from domestic users since midnight on December 31, 2022.
From the financial report performance, both listed cross-border internet brokerages show remarkable results.
The 2025 financial report shows that Tiger Brokers achieved an annual revenue of $612 million, a year-on-year increase of 56.3%; the non-GAAP net profit attributable to the parent company reached $187 million, a year-on-year increase of 164.7%, both hitting record highs. As of the end of 2025, Futu's financial report shows that Futu Holdings' total revenue reached $2.935 billion, an annual growth of 68.1%; under non-GAAP standards, the net profit reached $1.496 billion, an annual increase of 101.9%.