Futu braces for mainland business shrink after CSRC order
Futu will phase out its mainland Chinese trading services over two years following a regulatory order, though the broker insists the impact on its broader operations will be limited.
Futu has been ordered by the China Securities Regulatory Commission (CSRC) to completely halt the illegal provision of trading services on the mainland within two years. The online broker confirmed it will comply with the mandatory rectification order while keeping its physical outlets in Hong Kong open.
The regulatory intervention forces a deliberate shrinkage of Futu’s mainland-funded client base. By the end of March 2026, mainland Chinese-funded accounts had fallen to 13 per cent of the broker's total account count. Their combined size accounted for 17 per cent of total client assets, according to a company briefing in Hong Kong on Monday.
For market participants, the immediate risk to Futu’s overall valuation appears somewhat capped by these exposure metrics. With mainland assets comprising less than a fifth of the total book, the direct hit to the firm's fee-generating capacity is limited. Still, the mandated exit eliminates a historical demand driver for a platform built on facilitating cross-border trades for mainland investors.
Daniel Tse, managing director of Futu Securities, declined to disclose the precise ratio of mainland-funded accounts following the CSRC's penalty. However, he pushed back against the notion that the regulator was singling out the company. Tse characterized the crackdown as an "industry-wide issue" that will affect the broader sector of offshore brokers servicing mainland clients.
"It will definitely see a gradual decrease. Our principle is to handle it as quickly as possible," Tse said. The executive stressed that the company is committed to navigating the wind-down without alienating its user base. "We must resolve compliance issues with a ‘client-first’ approach," he added.
As the two-year rectification clock ticks, Futu's strategy hinges on demonstrating regulatory rigour to protect its remaining business. "We will process the rectification as fast as possible," Tse said, noting that "compliance is Futu’s core strength." The firm’s vow to retain its Hong Kong operations signals an effort to anchor its brand in a fully licensed jurisdiction.
