On May 16, Fortis Holdings Limited ("Fortis") and UP Fintech Holding Limited ("Tiger Securities") announced that they would remove their applications from mainland China.。

Futu will remove the "Futu Niu Niu" app from the app store in China from May 19.。The company said that the stock of domestic customers can still trade through the Futu Bull App, and the related services and business will not be affected in any way.。In addition, the download and use of the "Futu Niu Niu" App by HKSAR and all overseas users will not be affected.。

Tiger Securities also announced that from May 18, it will adjust the way domestic users update their clients and remove the "Tiger International" App from the domestic application market.。This adjustment will not affect the normal use of App by existing customers.。From midnight on December 31, 2022, the company will no longer accept applications from users in China to open an account.。

On December 30, 2022, the SFC issued an announcement characterizing the cross-border business of Futu and Tiger Securities' applications.。"The conduct of cross-border securities business for domestic investors without the approval of the SFC constitutes illegal operation of securities business in accordance with the Securities Law and other relevant laws and regulations.。At the same time, the SFC asked the two companies to rectify the above-mentioned violations: "One is to ban incremental illegal business activities in accordance with the law."。It is prohibited to solicit domestic investors, develop new domestic customers and open new accounts.。Second, properly handle the stock business。In order to maintain market stability, the stock of domestic investors is allowed to continue to conduct transactions through the original foreign institutions, but foreign institutions are prohibited from accepting incremental funds transferred to the accounts of such investors in violation of China's foreign exchange regulations.。"

The two companies have announced the removal of the App, which may be a corrective response to the regulatory requirement of "prohibiting the solicitation of domestic investors and the development of new domestic customers and the opening of new accounts."。

As early as 2021, the SFC had interviewed the executives of Futu and Tiger Securities and asked them to regulate their cross-border securities business for domestic investors in accordance with the law.。At the end of October 2021, Sun Tianqi, director of the Central Bank's Financial Stability Bureau, publicly stated that cross-border Internet brokerages were "driving without a license."。

The two companies' operations in mainland China have been in a gray area, allowing some local investors to bypass capital controls and trade stocks in markets such as the Hong Kong SAR and New York.。According to media reports in February, the Hong Kong branches of some Chinese brokerages followed unwritten instructions from the CSRC to stop opening accounts for mainland clients, with the aim of stemming illegal capital outflows.。

Robert Lee, a Hong Kong legislator representing the financial services industry, said: "The regulatory action on FTU and Tiger Securities clearly shows that financial security remains a priority for China," "but Chinese customers can still be obtained as long as they comply with the regulations."。"

Hanyang Wang, an analyst at 86 Research, said: "This removal is beyond expectations, but is not expected to have a material impact on current business operations, as the two companies have ceased new user registration in mainland China since December 31, 2022.。"

Citigroup analysts said in a report that despite the removal of the two apps, the customer base of the two brokerages in mainland China is expected to remain unchanged.。Analysts cited the case of Didi App's removal in 2021, saying that Didi succeeded in retaining most of its customers due to a lack of high-quality alternatives.。

As a result of the news, the corresponding shares of both companies listed on the Nasdaq Stock Exchange fell to varying degrees。On May 16, Futu Holdings fell 4.43%, at 41.$24; Tiger Securities down 7 on day.37%, reported 2.64美元。

After being asked to rectify, Tiger Securities launches TigerGPT, Futu announces foray into Malaysia

The two companies are also actively restructuring their businesses after being asked by regulators to rectify late last year。

According to media reports, Tiger Securities announced the launch of an artificial intelligence investment assistant - TigerGPT on April 11.。TigerGPT is a text-generating AI chatbot developed using Tiger International's financial database and OpenAI technology and will be built into its trading platform Tiger Trade.。Tiger Securities said TigerGPT is currently in the user testing phase and will invite users from designated markets to participate.。

Tiger Securities also said that more than 90 per cent of new funding accounts in the fourth quarter of 2022 came from outside mainland China, with average net asset inflows from new clients in Singapore approaching 1 per cent..$20,000, a further increase from previous quarters。

Futu also chose to vigorously expand overseas markets.。As a major market for FTU Holdings, FTU performed well in Singapore last year。In 2022, the asset size of the company's wealth management business in Singapore grew by 64.2%, the number of positions increased by 75.1%。At the same time as announcing the removal of Futu Bull, the company announced its entry into the Malaysian market.。Futu Holdings, a wholly owned subsidiary of Malaysia, has recently received in-principle approval for a capital markets services licence from the Malaysian Securities Regulatory Commission.。The company said it will enter the Malaysian market through the overseas version of the trading platform moomoo.。

Focus on financial security Kaisheng Rongying was reviewed by the national security authorities.

In recent months, China has also stepped up scrutiny of relevant financial companies that could endanger financial stability and national security.。When financial security is ongoing。

Recently, the national security authorities, in conjunction with relevant departments, have publicly enforced the law on the consulting company Kaisheng Rongying Information Technology Co., Ltd. (hereinafter referred to as "Kaisheng Rongying").。

According to the Shanghai National Security Bureau, Kaisheng Rongying has more than 1,000 customers, both at home and abroad.。The company also has a database of over 300,000 experts.。In practice, the company's staff will focus on domestic policy research, national defense, financial and monetary, high-tech, energy resources, medicine and health and other key areas, important industries to select influential experts.。

A police officer from the Shanghai National Security Bureau said: "Kaisheng Rongying and each expert interviewed will sign a business contract containing an 'exemption clause' in advance, requiring the experts to perform their own confidentiality responsibilities and bear their own legal consequences.。The relevant experts were attracted by the generous remuneration offered by the consulting company, and believed that the other party was a law-abiding, compliant, standardized management of the enterprise, and then relaxed their vigilance, in the foreign-related consulting disclosure of internal sensitive content and even state secrets and intelligence, embarked on the road of crime.。"

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