Chinese online brokers Futu, UP Fintech face regulatory risks

Photo: Futu Holdings

US-listed Chinese online brokerages Futu Holding and UP Fintech Holding face regulatory risks as China’s new personal data privacy law takes effect on Nov. 1, the official People’s Daily said in an analysis on its website.

Such brokerages, which help mainland Chinese individuals invest in overseas stock markets such as in the United States and Hong Kong, could violate data privacy rules and also run compliance risks, the article said.

China has launched a flurry of crackdowns targeting sectors ranging from technology to cryptocurrency to property. The People’s Daily’s article could put Chinese online brokers next in the regulatory crosshairs.

China will implement the Personal Information Protection Law from Nov. 1, complementing the Data Security Law in regulating cyberspace and safeguarding national security.

The new rules will regulate export of personal data, posing a challenge to online brokers that provide cross-border trading services to mainland Chinese citizens, the People’s Daily said.

Brokerages such as Futu and UP Fintech don’t have brokerage licences on the mainland, but Chinese citizens can open accounts online after submitting personal information related to ID cards, bank cards and tax records, the article said, adding: “after personal information is collected, where does it go?”

Online brokers, which also include Snowball Securities, face business compliance risks as well, the article said.

Currently, Chinese investors can invest in overseas securities markets through the cross-border Connect schemes, and through Qualified Domestic Institutional Investors (QDII).

Apart from these two channels, China’s securities regulator has not allowed any institutions to provide cross-border trading services to domestic investors, People’s Daily said.

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.