BEIJING China's securities regulator said on Wednesday that a clean-up of illegal cross-border brokerage businesses does not affect existing accounts, refuting speculation that offshore brokerages would be banned from servicing mainland investors.
On Monday, official Chinese media reported that Hong Kong-based Guotai Junan International had suspended the opening of accounts by mainland clients, triggering fears of a total ban on such a business.
China Securities Regulatory Commission CSRC recently launched a campaign to clean up illegal cross-border activities by Chinese brokerages, but said existing clients wouldn't be affected.
The idea is to ban offshore institutions without a license in China from soliciting and opening new accounts for onshore investors, according to the CSRC.
Existing clients are still allowed to trade through offshore institutions, but fresh money inflows into those accounts must be strictly regulated by China's foreign currency management rules. Some media reports are not factual and not objective, according to the CSRC. Mainland Chinese can buy overseas securities through official channels such as the outbound investment scheme QDII and cross-border programme the Stock Connect.
Many Chinese open stock trading accounts in Hong Kong are able to bypass China's strict capital control.
On December 30, the CSRC said online brokerages Futu Holding and UP Fintech Holding violated Chinese rules and banned them from soliciting mainland investors.
The CSRC said on Wednesday that most brokerages with such businesses are actively making corrective measures and have stopped opening new accounts.
The CSRC said it would strengthen cooperation with offshore regulatory bodies to ensure the clean-up doesn't disrupt markets.
Hong Kong-based Bright Smart Securities said this week it would suspend accounts of mainland Chinese clients starting February 16 as it waits for clarification from Chinese regulators.