China’s securities regulator warns against use of unauthorised apps to trade overseas shares
Equity trading platforms have emerged which enable domestic investors to channel Hong Kong or US dollars into overseas markets
The China Securities Regulatory Commission (CSRC), China’s top securities regulator, on Tuesday warned mainland Chinese investors to stay away from new internet platforms and mobile apps geared towards overseas equity trading, citing operating risks in the unauthorised platforms.
“A number of mainland internet companies emerged recently. They cooperate with overseas brokerage companies, providing channels and services for domestic investors to trade the overseas equity market...While [these activities] lack legal protection,” the CSRC said in a statement that appeared under the risk alert section on its official website on Tuesday.
Other analysts said these companies were operating in a legal grey zone, raising concerns whether they would be allowed to continue operations.
Offshore investment by Chinese individuals are tightly controlled under the current rules. Traditionally, investors can only trade overseas equities through a programme called “QDII” which offers quotas to select institutions. Each Chinese citizen faces an annual exchange swap cap of US$50,000.
In recent months, a number of mobile apps have appeared which help investors to trade offshore shares using US or Hong Kong dollars held in their domestic accounts.
Tiger Securities, Futu Network, and Jimu Stock, were listed as examples by the CSRC. But the regulator did not clarify if these platforms were illegal, nor did it indicated they would be forced to close.
