Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Chinese Online Brokers Futu, Up Fintech Slump on Regulatory Risks

Published 14/10/2021, 16:50
Updated 14/10/2021, 16:50
© Reuters.

© Reuters.

By Dhirendra Tripathi

Investing.com – Shares of Futu Holdings (NASDAQ:FUTU) and Up Fintech (NASDAQ:TIGR) plunged Thursday on a Reuters report that the U.S.-listed Chinese online brokerages face regulatory risks in their home as the country’s new personal data privacy law takes effect next month.

Futu fell 15% and Up Fintech fell 23% on the Nasdaq.

According to an analysis on the website of the official People's Daily the Reuters report referred to, they could violate data privacy rules, and also run compliance risks.

Futu and UP Fintech don't have brokerage licenses on the mainland but enable mainland China individuals to invest in overseas stock markets such as the U.S. and Europe. Citizens can simply open accounts online after submitting personal information related to ID cards, bank cards and tax records. The People’s Daily piece wondered where the data goes once it’s collected.

The world’s second largest economy will implement the Personal Information Protection Law from November 1, complementing the Data Security Law, in regulating cyberspace and safeguarding national security, Reuters said.

Tighter compliance for online brokerages is one in a series of steps the Chinese authorities have undertaken over the last few months to regulate internet entities and increase oversight of the end-use of private data. There has also been a broader policy push towards more equitable distribution of wealth and greater welfare.

Steps have included less commission being charged by online food delivery chains and cab aggregators, more rest for cab drivers, regulating time children spend on online games and increased scrutiny of casinos in Macau.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.