SHANGHAI, Oct 14 (Reuters) – U.S.-listed Chinese language on-line brokerages Futu Holding (FUTU.O) and UP Fintech Holding face regulatory dangers as China’s new private knowledge privateness legislation takes impact on Nov. 1, the official Individuals’s Day by day stated in an evaluation on its web site.
Such brokerages, which assist mainland Chinese language people put money into abroad inventory markets corresponding to in the US and Hong Kong, may violate knowledge privateness guidelines and likewise run compliance dangers, the article stated.
China has launched a flurry of crackdowns concentrating on sectors starting from expertise to cryptocurrency to property. The Individuals’s Day by day’s article may put Chinese language on-line brokers subsequent within the regulatory crosshairs.
“Since our founding Futu has insisted that the safety of non-public data and knowledge is of prime precedence,” Futu stated in a press release in response to the article.
“Futu has been strictly complying with related legal guidelines and rules. Going ahead, we’ll proceed to actively cooperate with regulatory authorities to raised safeguard private data,” stated Futu, whose Nasdaq-listed shares fell greater than 10%.
U.S.-traded shares of UP Fintech, which couldn’t be instantly reached for remark, slumped greater than 20%.
China will implement the Private Data Safety Regulation from Nov. 1, complementing the Knowledge Safety Regulation in regulating our on-line world and safeguarding nationwide safety.
The brand new guidelines will regulate export of non-public knowledge, posing a problem to on-line brokers that present cross-border buying and selling providers to mainland Chinese language residents, the Individuals’s Day by day stated.
Brokerages corresponding to Futu and UP Fintech do not have brokerage licences on the mainland, however Chinese language residents can open accounts on-line after submitting private data associated to ID playing cards, financial institution playing cards and tax data, the article stated, including: “after private data is collected, the place does it go?”
On-line brokers, which additionally embrace Snowball Securities, face enterprise compliance dangers as properly, the article stated.
At present, Chinese language traders can put money into abroad securities markets by way of the cross-border Join schemes, and thru Certified Home Institutional Buyers (QDII).
Aside from these two channels, China’s securities regulator has not allowed any establishments to offer cross-border buying and selling providers to home traders, Individuals’s Day by day stated.
Reporting by Samuel Shen and Emily Chow
Modifying by Mark Potter, Kirsten Donovan
Our Requirements: The Thomson Reuters Trust Principles.