Chinese Brokerages Implement Buying Bans for Mainland Clients in Hong Kong Accounts
Following a regulatory crackdown, securities firms like Orient Securities and Guotai Junan have notified customers with Hong Kong trading accounts that they are banned from buying stocks and transferring funds for mainland Chinese investors.
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According to the South China Morning Post, some securities firms have initiated measures to address non-compliant overseas stock trading by mainland Chinese investors, a process that began several months ago with penalties issued to Tiger Brokers and Futu Securities International.
Orient Securities has issued a customer notice indicating that its mainland-based clients holding trading accounts in its Hong Kong division will be prohibited from purchasing stocks and depositing funds beginning on Wednesday. Similarly, Guotai Junan International Holdings, which is the overseas entity of Shanghai-based Guotai Haitong Securities, released a comparable notification stating that investors located onshore would no longer be able to increase their stock holdings via their overseas accounts starting this week.
People familiar with the situation reported that Chinese regulators provided informal 'window guidance' over the weekend, directing the offshore branches of domestic brokerage firms to enforce restrictions on buy orders and fund transfers for their existing mainland clients. One source mentioned that onshore investors attempting to place buy orders were even required to verify by telephone that they were physically situated outside of mainland China.
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