Shanghai, Oct 14 Reuters - U.S. - listed Chinese online brokerages Futu Holding and UP Fintech Holding face regulatory risks as the new personal data privacy law in China starts on November 1, official People's Daily said in an analysis of its website.
Such brokerages that help mainland Chinese individuals invest in overseas stock markets like in the United States and Hong Kong, could violate data privacy rules and also run compliance risks, the article said.
China has launched a flurry of strikes targeting sectors ranging from technology to cryptocurrency to property. With the implementation of the Cyber Security Law from 1 Nov. to 1 Nov., China will combine with the Personal Information Protection Law in safeguarding national security and regulating cyberspace.
The new rules will regulate the import of personal data, posing a challenge to online brokers that provide cross-border trading services to Chinese citizens, the People's Daily said.
Brokerages such as Futu and UP Fintech don't have brokerage licenses on the mainland, but Chinese citizens can open accounts online after submitting personal information related to ID cards, bank cards and tax records, the article said, adding: After personal information is collected, where does it go? Online brokers, which also include Snowball Securities face compliance risks as well, the article said.
Currently, Hong Kong's investors can invest in domestic securities markets through cross-border Connect schemes and through Qualified Domestic Institutional Investors QDII Apart from these two channels, China's securities regulator has not allowed any institutions to provide cross-border trading services to overseas investors, People's Daily said.