{"text":[[{"start":10.4,"text":"China’s top securities watchdog will penalise three brokerages for conducting illegal cross-border securities businesses in an effort to close one of the last loopholes for retail traders to get around the country’s strict capital controls."}],[{"start":24.55,"text":"The China Securities Regulatory Commission said on Friday that Tiger Brokers, Futu Holdings and Longbridge Securities had violated the country’s securities laws and “disrupted market order” by facilitating trades of foreign securities for mainland Chinese clients without regulatory approval."}],[{"start":43.35,"text":"The CSRC said in a statement that it planned to confiscate all illegal gains from the companies’ onshore and offshore entities and impose further penalties."}],[{"start":52.8,"text":"The commission did not give details, but Futu said it had received preliminary notice of a Rmb1.85bn ($271mn) fine for the company and a Rmb1.25mn fine for its founder Leaf Hua Li. Tiger Brokers said it had been given notice of proposed fines of Rmb308mn, on top of confiscation of about Rmb103mn in illegal income, while its chief executive, Wu Tianhua, was told to expect a fine of Rmb1.25mn."}],[{"start":84.35,"text":"The penalties come three years after the commission began a push to clamp down on such services, which retail traders used to get around capital controls."}],[{"start":93.35,"text":"The brokerages, which often help Chinese tech workers manage employee equity received from outside the country, had previously allowed mainland clients to open accounts and access foreign securities, especially US stocks, despite not being licensed to provide overseas investment services."}],[{"start":110.75,"text":"Shares in US-listed UP Fintech, Tiger Brokers’ parent company, and Futu Holdings fell more than 40 per cent in pre-market trading following the late Friday statement."}],[{"start":122.7,"text":"The CSRC said the penalties were meant to “fully safeguard the order and stability of China’s capital markets”."}],[{"start":130.65,"text":"In a joint statement with seven other agencies involved in the regulatory campaign, authorities said mainland investors would be encouraged to invest overseas through legal channels such as Stock Connect, Wealth Management Connect and QDII programmes."}],[{"start":146.95000000000002,"text":"However, the Stock Connect and Wealth Management Connect programmes only allow access to Hong Kong-listed stocks and financial products, while the QDII programmes are subject to a quota."}],[{"start":159.3,"text":"UP Fintech said it would “strictly comply with regulatory requirements and actively co-operate with the relevant process”."}],[{"start":167.3,"text":"It insisted business was operating as usual and it “has always placed compliance as a top priority and will continue to maintain close communication with regulators”."}],[{"start":177,"text":"Futu said clients in mainland China accounted for only 13 per cent of the group’s total asset-holding clients and it would “steadily advance the relevant compliance work in strict accordance with regulatory requirements”."}],[{"start":190.65,"text":"Longbridge did not immediately respond to a request for comment. "}],[{"start":202.2,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1779499528_8389.mp3"}