Futu, UP Fintech shares fall on plan to remove apps in China

Futu, UP Fintech shares fall on plan to remove apps in China

SHANGHAI, May 16 (Reuters) – New York-listed shares of Futu Holdings Ltd and UP Fintech Holding Ltd plunged in pre-market trading on Tuesday, after the online brokerages said they will remove their apps in mainland China following guidance from regulators.

The announcement comes amid Beijing’s heightened focus on data security and tighter capital controls.

Futu-listed shares fell more than 15% in pre-market trading, while UP Fintech fell about 10%.

The removal of the apps represents the latest effort by Futu and UP Fintech to satisfy Chinese regulators, who warned as early as 2021 that online brokers not licensed in China were acting illegally if they served Chinese clients over the Internet.

In December last year, the China Securities Regulatory Commission (CSRC) said Futu and UP Fintech had been conducting illegal securities business and banned them from soliciting new business from mainland investors.

Futu, backed by Chinese internet giant Tencent Holdings ( 0700.HK ), said on Tuesday that its apps will be removed from China’s app stores from May 19, but existing customers are not affected.

UP Fintech, also known as Tiger Brokers, said it will take down its trading platform from May 18 to comply with the CSRC’s rectification guidance. It added that the company remains dedicated to serving existing customers in mainland China.

Both brokerages emphasized that app downloads in other markets are not affected.

“The removal is unexpected but will not have a significant impact on current business operations as the two companies have stopped acquiring users in mainland China since December 31, 2022,” said Hanyang Wang, an analyst at 86Research.

See also  BHG Financial wins the Innovation in Lending Award at Fintech Nexus USA 2023

It is not clear whether Hong Kong units of Chinese brokerages, such as China International Capital Corp and Haitong Securities, also need to remove their apps in China.

Some Hong Kong units of Chinese brokerages had stopped opening accounts for mainland clients following unwritten guidance from the CSRC aimed at countering illicit money flows, state media reported in February.

Futu, which has delayed its listing plan in Hong Kong, is licensed in Hong Kong, Singapore and the United States. It said in its 2020 annual report that it primarily serves the emerging affluent Chinese population, and a large number of its customers were mainland Chinese nationals.

Tiger Brokers said on Tuesday that “in the future, the company will follow all applicable rules and regulations in mainland China, and serve its existing customers well.”

Reporting from the Shanghai newsroom

Our standards: Thomson Reuters Trust Principles.

You may also like...

Leave a Reply

Your email address will not be published. Required fields are marked *