China CSRC Penalizes Three Brokers, Restricts Mainland Access

China's Securities Regulatory Commission (CSRC) announced severe penalties against Tiger Brokers, Futu Securities, and Longbridge Securities on May 22, 2026, for operating unauthorized brokerage, fund sales, and futures services for mainland Chinese clients. The enforcement action was coordinated across nine government departments, which jointly issued an "Implementation Plan for Comprehensive Rectification of Illegal Cross-border Securities, Futures and Fund Management Activities." US-listed shares of parent companies fell sharply immediately following the announcement, with Tiger Brokers dropping over 10% in premarket trading and Futu Holdings declining more than 5%, with some reports showing declines reaching 35% through the session.

Enforcement Details and Restrictions

All illegal gains from the three platforms will be confiscated, both domestically and internationally. A two-year concentrated rectification period begins immediately. During this window, existing mainland users on unauthorized platforms can only sell existing holdings and withdraw funds. No new buy orders or new inbound fund transfers are permitted. After the two-year period ends, the affected platforms must completely shut down mainland-facing websites, trading software, and related servers.

The CSRC confirmed that investor assets will remain safe during the transition period.

Legal Alternatives for Overseas Market Access

The CSRC stated that legal channels remain open for investors seeking overseas market access, including the Stock Connect program, QDII (Qualified Domestic Institutional Investor), and Cross-border Wealth Management Connect.