Q:Recently, the market is more concerned about the illegal cross-border business activities of overseas licensed institutions to regulate and rectify the situation, what is the comment of China Securities Regulatory Commission?

A:On December 30, 2022, the CSRC advanced the rectification work of illegal cross-border business development of Futu Holdings and Tiger Securities in accordance with the law and issued a press release. on January 13, 2023, the CSRC officially issued the "Measures for the Administration of Securities Brokerage Business", which clearly will strengthen the daily supervision of illegal cross-border brokerage business and steadily and orderly promote the rectification and regulation work. In accordance with the principle of implementing uniform supervision of the same type of business, the CSRC recently deployed the work of regulating and rectifying the illegal cross-border exhibition of business by the overseas subsidiaries of domestic securities companies.

The above-mentioned illegal cross-border activities are regulated and rectified in accordance with the principle of "effective containment of the increase and orderly dissolution of the stock". The core requirement is that foreign institutions not licensed in the territory are prohibited from recruiting domestic investors and opening new accounts for them; at the same time, the stock of domestic investors are still allowed to continue to trade through the original foreign institutions, but the stock of investors should strictly comply with the relevant provisions of China's foreign exchange management when transferring incremental funds to foreign accounts.

We are concerned that some of the media reports are not objective and untrue. It is understood that the vast majority of securities companies involved in such business are actively implementing the relevant rectification requirements and have stopped opening new accounts in violation of the law. The relevant securities companies and their overseas subsidiaries are able to fully and accurately understand the regulatory requirements, and do their rectification in an orderly and compliant manner in accordance with the law, and will not restrict the trading of their stock customers for no reason.

In the next step, CSRC will urge the relevant securities firms and their subsidiaries to implement the relevant legal and regulatory requirements and steadily advance the standardized rectification work,maintain the normal order of the market and protect the legitimate rights and interests of investors. Meanwhile, CSRC will continue to strengthen regulatory cooperation with domestic and foreign regulators and ensure the smooth progress of the rectification work, as well as maintain the smooth operation of the market.