On May 22, the China Securities Regulatory Commission, together with the Ministry of Industry and Information Technology, Ministry of Public Security, and the People's Bank of China, among eight other departments, issued the "Implementation Plan for Comprehensive Rectification of Illegal Cross-border Securities and Futures Fund Operations." The message sent by this document is very clear: the state's regulation of illegal cross-border financial activities is escalating from "targeted crackdowns" to "full-chain crackdowns."

Those overseas brokerages who previously had no licenses and secretly recruited people to trade in US and Hong Kong stocks are now being completely "uprooted." Not only are new accounts banned, but even existing clients who have already opened accounts will be forced to sell and not buy for the next two years. Eventually, these platforms will completely exit the Chinese market.

Core of Rectification: Resolutely Eliminate New Enterprises and Steadily Clear Out Existing Ones. This rectification plan can be described as a "thunderous measure," with the core goal of fully banning illegal cross-border business activities by overseas institutions within two years

|Who is within the scope of the rectification?

Not only securities firms like Futu and Tiger, which register overseas but operate domestically in violation of regulations, but also include domestic affiliates promoting them, illegal intermediaries soliciting customers, online self-media publishing account opening tutorials, and internet platforms that provide convenience—all are being targeted.

How to manage it? (Blocking the entire business chain)

Prohibition of marketing: No advertising, posting information, or running rebate activities within the country.

Prohibited Services: No provision of account opening, transaction instruction processing, or fund transfer services.

Prohibition of assistance: Domestic companies and individuals are not allowed to provide any technical support or customer service to these overseas institutions

What about existing customers? (2-year transition period)
This is the part everyone cares about most. The plan sets a 2-year centralized rectification period. During this period, existing investors' accounts can only perform "one-way selling" operations, meaning they can only withdraw money and cannot transfer funds or buy new stocks. After the 2-year period expires, these overseas institutions must completely shut down domestic websites, apps, and supporting servers, completely cutting off services

In addition, regulators will take strong action against underground money exchange shops and other illegal fund outflow channels, and will negotiate with relevant banks to strengthen foreign exchange reviews and plug the "money bags" of illegal stock trading at the source.

｜透露出哪些信号？

信号一：金融合规底线不可触碰
此次八部门联合发文，且涉及公安部和网信办，说明跨境非法金融活动已被上升到维护国家金融安全的高度。任何试图绕过监管、利用信息差进行跨境套利的商业模式都将面临极高的法律风险。

Signal 2: Personal Global Asset Allocation Must Go Through the "Main Door" With
the closure of illegal channels, ordinary investors who want to allocate overseas assets must use compliant channels (such as Hong Kong Stock Connect, QDII funds, mutual recognition funds, etc.). Although this limits some high-risk speculative behaviors, it greatly protects investors' fund security and prevents the risk of "black platforms" absconding with funds

Signal 3: Fintech and compliance services are undergoing a reshuffle.
Third-party service providers that previously relied on providing traffic to overseas illegal brokers and surviving through software development will face a crisis of zero business, marking a complete industry clearance

Kingtech Perspective | Focus on two types of opportunities

Opportunity 1: After compliant cross-border financial service providers
are blocked by illegal channels, financial institutions with legal cross-border business qualifications (such as the international business departments of leading securities firms and QDII product lines of public fund companies) will absorb a large amount of overflowing compliance investment demand, and market share is expected to further concentrate

Opportunity Two: Investor Education and Wealth Management Transformation
With stricter regulations, helping high-net-worth clients and families conduct legal and diversified global asset allocations will become the core competitiveness of wealth management institutions. Comprehensive service institutions capable of providing professional cross-border tax, legal, and investment consulting will see development opportunities

In the short term, investors accustomed to "one-click global trading" through overseas brokers may feel inconvenienced and even face growing pains in asset disposal; In the long run, only by tightening the risk fence and blocking illegal channels can the wealth of investors truly be protected and cross-border investment can operate healthily under the sun.