Cross-border online brokerages Futu Securities and Tiger Brokers have recently further tightened account opening restrictions for Mainland China residents. According to the latest regulatory requirements, the two brokers have significantly raised the account opening threshold, essentially closing the account opening channel for ordinary Mainland residents.

Futu Securities' account opening conditions have now been changed. Currently, Mainland China clients need to hold proof of overseas permanent residency to open an account. Futu Niu Niu customer service stated that the company is undergoing a system upgrade; at this stage, only clients with Hong Kong or Macau ID cards can open accounts. After the system upgrade is completed, clients will be able to use their Mainland ID card + proof of overseas permanent residency to open an account.

Tiger Brokers has also simultaneously adjusted its account opening policy. In response to the latest regulatory requirements, the company ceased accepting account openings from Mainland China residents based on providing proof of working or living overseas starting last week. It now only accepts applications from clients holding non-Mainland China ID documents. This means that Mainland residents without overseas permanent residency status can no longer open new accounts with these two brokers.

The door for account opening at cross-border online brokerages targeting Mainland China residents is closing further. The tightening of channels for investing in Hong Kong and US stocks has become a recent focus of market attention.

Gradually Tightening Account Opening Conditions

This adjustment is not a sudden move. Futu Securities' previous account opening policy was: Mainland China clients were limited to those actually working or living overseas, requiring simultaneous provision of a valid Mainland ID card and relevant proof of working or living abroad.

Tiger Brokers' previous policy was: Mainland Chinese clients residing overseas needed to provide valid documentation proving overseas work or life, such as a local work visa, residence permit, tax receipt, etc.

Looking at the rectification process, the setting of account opening conditions for Mainland China residents by Futu Securities and Tiger Brokers has been gradually tightened. The core requirement shifted from proof of existing accounts at other overseas brokers, to proof of working or living abroad, and recently to a complete closure.

Regulatory Background and Rectification Process

Since 2022, the two brokers began closing account opening channels for Mainland China residents under regulatory requirements. In December 2022, the China Securities Regulatory Commission (CSRC) issued an announcement promoting the rectification work regarding the illegal cross-border business activities of Futu Holdings and Tiger Brokers, proposing a rectification approach of "effectively curbing incremental (business) and orderly resolving存量 (existing business)."

The CSRC pointed out at the time that Futu Holdings and Tiger Brokers were conducting cross-border securities business targeting domestic investors without CSRC approval. According to the "Securities Law" and other relevant laws and regulations, their actions constituted illegal securities business operations.

On October 15, 2021, the CSRC expressed its regulatory stance through media statements. On November 11 of the same year, the CSRC conducted regulatory interviews with the senior management of Futu Holdings and Tiger Brokers.

Similar Actions by Other Brokers

It's not just Futu and Tiger Brokers; other cross-border brokers have taken similar actions. Interactive Brokers, the world's largest online brokerage, has also gradually tightened account opening channels for Mainland China residents since August. Its app has been removed from app stores within China.

Another overseas broker, Longbridge Securities, also announced in June a complete halt to account openings for users within Mainland China using the method of proving existing overseas accounts. Its app can also no longer be searched for or downloaded.

These adjustments indicate that regulators are comprehensively and deeply advancing the rectification of cross-border online brokers operating businesses targeting Mainland residents.

Legitimate Avenues for Investing in Hong Kong and US Markets

For Mainland investors, legitimate channels for investing in Hong Kong stocks still exist. Currently, Mainland investors can invest in Hong Kong stocks through the Stock Connect programs and Hong Kong stock ETFs listed in Mainland China.

The core requirement for applying for Stock Connect is that the average daily assets in the securities and capital accounts must not be less than RMB 500,000 within the 20 trading days prior to applying for permission activation.

Investing through Mainland-listed Hong Kong stock ETFs has no capital threshold, making it more accessible for retail investors. According to Wind data statistics, the share size of Hong Kong stock ETF products has grown significantly recently, reflecting strong investor interest in the Hong Kong stock market. Regarding whether the account opening threshold for Mainland residents will be restored to the original requirements in the future, Futu Securities customer service personnel stated that they have not received any related notifications.

As China's tax authorities strengthen the implementation of tax collection on individuals' overseas income, since the second quarter of this year, many Mainland residents investing in Hong Kong and US stocks have intensively received tax supplement notices from local tax authorities. Changes in investment channels remind Mainland investors to always conduct overseas investments through compliant channels to ensure asset safety, legality, and compliance.