Cross-border brokerage business reappears strong supervision?
On February 13, there was news from the Hong Kong market that Guotai Junan International Holdings Co., Ltd. (hereinafter referred to as "Guotai Junan International"), a Chinese-funded securities company, had suspended account opening for mainland residents.
In response to the relevant situation, a reporter from Beijing Business Daily consulted customer service staff and learned that there is a quota for opening an account as a mainland resident and the current appointment is full, and the waiting period has not yet been clarified.
According to the reporter's investigation, at present, many Chinese securities firms such as CITIC Securities International and China Merchants Securities International can still open accounts normally, but there are also Hong Kong local securities firms such as Yaocai Securities, which announced that they will temporarily close the accounts of customers who opened accounts with mainland identities starting from February 16. .
In the eyes of industry insiders, the regulatory authorities have gradually strengthened the supervision of cross-border business of securities companies, which may be related to foreign exchange management provisions and more refined domestic financial supervision.
However, after a period of adjustment, the market may move towards a more sustainable and stable state after adapting to the new policy.
Suspension of account opening for mainland customers
On February 13, there was market news that Guotai Junan International, a Chinese-funded brokerage, had suspended account opening for mainland residents.
In this regard, a reporter from Beijing Business Daily called and learned that there is currently a quota for opening an account for mainland residents and the current appointment is full. You need to leave your personal information to make an appointment, but the waiting period is not yet clear.
According to media reports, people familiar with the matter said that the headquarters of Guotai Junan International has notified Guotai Junan International to stop opening accounts for mainland residents, and existing domestic customers will not be affected for the time being.
In response to the above situation and the reasons behind it, a reporter from Beijing Business Daily published an article to interview Guotai Junan Securities, but as of press time, no relevant reply has been received.
At the same time, some investors said that the customer service staff of Chinese securities firms such as CITIC Securities International, Orient Securities International, and China Merchants Securities International said that mainland customer service can still open accounts.
When a reporter from Beijing Business Daily called and interviewed the customer service of CITIC Securities International, they learned that it is still possible to open an account with a mainland identity. As long as you prepare the required documents for account opening, you can apply for account opening. The company will start processing related applications in about 2-3 working days.
China Merchants Securities International also stated that if the investor's qualifications are qualified, the relevant account opening business can still be handled.
Although most Chinese-funded securities firms can still open accounts normally or maintain the normal use of related accounts, recently, local securities firms in Hong Kong have announced that they will suspend the use of accounts opened with mainland identities.
It is reported that Yaocai Securities, a local brokerage in Hong Kong, continues to send email notifications to customers, saying that it will temporarily close the accounts of customers who opened accounts with mainland identities starting from February 16, and they will not continue to use them until they receive the latest guidance from mainland regulators.
The content of the email sent by Yaocai Securities to users with mainland identities shows that the accounts of customers who open accounts with mainland identities are suspended from buying and can only sell; the user's futures/options/leveraged foreign exchange/precious metals account cannot open new positions but can only close positions; , the user needs to withdraw all the balance in the account on or before February 23, 2023. If the balance in the account is not withdrawn before the deadline, Yaocai Securities will automatically deposit the balance into the designated account registered by the user in the company. Withdrawal bank account.
According to industry feedback, most local brokerages in Hong Kong are still able to open accounts normally, but there are also related reports that they may not be able to open accounts soon.
An insider of a Hong Kong Internet brokerage told a reporter from Beijing Business Daily that they have not received relevant notices yet, but they are always paying attention to regulatory requirements.
If relevant regulations are issued, the company will definitely embrace supervision.
Standardization and rectification continue to advance
Although it is still unclear whether Guotai Junan International has suspended the account opening of mainland identity users and the reasons behind it, but the recent supervision and regulation of the cross-border business of securities companies is indeed continuing to advance.
Previously, on December 30, 2022, the China Securities Regulatory Commission issued a document stating that it would promote the rectification of illegal cross-border business development of Futu Holdings Co., Ltd. (hereinafter referred to as "Futu Holdings") and UP Fintech Holding Limited (hereinafter referred to as "Tiger Securities"). .
The China Securities Regulatory Commission pointed out that in recent years, Futu Holdings and Tiger Securities have conducted cross-border securities business for domestic investors without the approval of the China Securities Regulatory Commission. According to the "Securities Law" and other relevant laws and regulations, their behavior has constituted illegal securities business.
According to the idea of "effectively curbing the increase and orderly dissolving the stock", the China Securities Regulatory Commission intends to require Futu Holdings and Tiger Securities to rectify the above-mentioned violations of laws and regulations.
The first 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.
The second is to properly handle stock business.
In order to maintain market stability, existing domestic investors are allowed to continue to conduct transactions through the original overseas institutions, but foreign institutions are prohibited from accepting incremental funds that violate my country's foreign exchange management regulations to be transferred to such investor accounts.
In the view of Wang Jianhui, a senior researcher of industrial economy, the gradual strengthening of supervision may be related to foreign exchange management provisions and more refined domestic financial supervision.
In addition, it may also be related to some mainland investors taking advantage of the relatively small size of the Hong Kong market, especially the infrequent trading of certain stocks, and relatively few market makers to take advantage of the loopholes to manipulate the market and affect market stability.
In the process of northbound capital investment, speculators may also exist, and use this channel to achieve the purpose of manipulating mainland stocks.
"In the context of more standardized regulatory policies, it will have a significant impact on speculative investors, and will also have a restrictive effect on the flow of funds through channels such as Hong Kong local securities companies and even Chinese-funded securities companies. For local securities companies in Hong Kong Related businesses may also be restricted or stopped,” Wang Jianhui added.
In addition, Wang Jianhui also mentioned that the regulatory measures taken by the current regulatory authorities are conducive to the governance of the gray area in the flow of cross-border funds.
During the implementation of relevant policies, there may be certain restrictions on the activity of northbound funds, but in the process of implementation, it is necessary to pay attention to the impact on the enthusiasm for participating in the market or the impact on normal capital flows. I believe that after a period of adjustment, the market will After adapting to the new policy, it may move towards a more sustainable and stable state.
Beijing Business Daily reporter Li Haiyuan