Correct analysis
The China Securities Regulatory Commission has stated that it is for foreign exchange control, mainly to prevent mainland investors from investing RMB funds in the US stock market through the Futu platform, because this is a loophole in the outflow of RMB capital. Futubull Niu platform, you can convert the funds in the US dollar account to Hong Kong dollars, trade in the Hong Kong stock market, or convert the funds in the A-share market to HKD/USD, open an account in the Hong Kong/US stock market, and then transfer the funds into the Hong Kong/US stock account for trading. The loophole is that funds in the Hong Kong/US stock market can be transferred to personal accounts at Hong Kong/Bank of America. Complete the outflow of funds. This is not permitted under China's foreign exchange management system. As long as this loophole is closed, the China Securities Regulatory Commission will not be able to control it. Because Futu is registered in Hong Kong and has branches in Singapore, the US, and Australia. The Chinese government has no right to interfere, replace, or fine foreign companies.
Therefore, the “rectification” had little impact on Futu; it's just that mainland customers cannot continue to grow. Overseas customers and transactions are not affected in any way. However, HKD/USD cannot be converted to RMB on the Futu platform, do A-share transactions, or transfer A-share RMB to personal accounts in mainland China. The purpose of the China Securities Regulatory Commission is only to block the free inflow/outflow of RMB and foreign capital on the Futu platform.
So the impact is minimal.
The market overreacted because no one in the company came out to explain it clearly, and they were also afraid that the explanation would not be thorough, they would be caught by American investors, and the legal litigation would go on.
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Lovely_Moo : Do you think it will be possible for FUTU to close the loophole? (i.e. mainland investors are not allowed to transfer from FUTU to personal bank in US)
15块钱买花盆 : A must
intellectual Mink_31 15块钱买花盆 : The successor that went in last week has already been buried, and the one who went in today is buried tomorrow is there any good fruit to fight with the Party
intellectual Mink_31 : You're continuing to let Futu evade regulation, right?
QianmengYu : Please keep on discounting![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
Ixy The Cat : Finally, a clear analysis that is devoid of FUD. The US is at a political and economic war with China and the Chinese authorities want to prevent the fallout of the US weaponising its financial leverage.
beedeebee : this story is not new, it was discussed back in 2021. Futu and Tiger already work closely with regulators to ensure compliance. This news is just to flood out weak holders.