Hong Kong-listed brokerages fall on report of mainland China client ban

Haitong International Securities

13/02/2023 07:44

SHANGHAI, Feb 13 (Reuters) - Hong Kong-listed brokerages
fell on Monday after state media reported that Guotai Junan
International has suspended account opening by mainland Chinese
clients, potentially hitting its business. 
    A source at Guotai Junan International's Shanghai-based
parent said the move followed unwritten "window guidance" from
China's securities regulators aimed at discouraging illegal
money outflows. 
    It also came after the China Securities Regulatory
Commission (CSRC) banned online brokerages Futu Holding  FUTU.O 
and UP Fintech Holding  1M5y.F  from soliciting new business
from mainland investors on December 30.
    Mainland investors are an important source of revenue for
Hong Kong-based brokerages, so the ban would have a negative
impact on future businesses, said the Guotai Junan source.
    Guotai Junan did not immediately reply to a Reuters request
for comment.
    Guotai Junan's Hong Kong-listed shares  2611.HK  fell
roughly 0.6% on Monday. Guolian Securities  1456.HK  dropped
nearly 3%, while Haitong International  0665.HK  lost 1.1%.
    Mainland Chinese can buy overseas securities via official
channels such as the cross-border investment scheme QDII, and
the Stock Connect program.
    However, many Chinese open stock trading accounts in Hong
Kong, potentially bypassing China's strict capital control.
    The CSRC has said that Futu and UP Fintech Hong Kong have
conducted cross-border securities businesses involving domestic
investors without regulatory consent, contravening Chinese laws.
 (Reporting by Samuel Shen, Jason Xue and Brenda Goh
Editing by Shri Navaratnam)
 ((samuel.shen@thomsonreuters.com;  +86 21 20830018; Reuters
Messaging: samuel.shen.thomsonreuters.com@reuters.net))