<p>The China Securities
Regulatory Commission (CSRC) and the Hong Kong Securities and Futures Commission
(SFC) have entered into a <a href=”https://www.financemagnates.com/terms/m/memorandum-of-understanding-mou/” class=”terms__main-term” id=”be605c57-2a03-46f0-ab00-96768c154f1a” target=”_blank”>Memorandum of Understanding (MoU</a>) that seeks to
strengthen their cross-border regulatory efforts in securities offering and
listing by domestic companies in both countries.</p><p>SFC announced the
cooperation on Friday in a joint statement published on its website. According
to the Hong Kong securities regulator, the MoU outlines the methods and procedures for the
issuing and listing of shares in both countries. The memorandum also provides
clarifications on how both regulators will go about a joint cross-border enforcement and information exchange. In addition, the agreement explains how
financial intermediaries in both countries are to be supervised.</p><p>“The MoU will
facilitate the CSRC and the SFC in discharging their supervisory functions,
jointly combating cross-boundary offences and misconduct, safeguarding the
legitimate interests of investors and ensuring the steady and healthy
development of both markets,” the regulator explained in the joint statement.</p><p>China Crackdowns on
Cross-Border Online Brokers</p><p>Meanwhile, the
signing of the agreement comes days after Hong Kong-based brokerages <a href=”https://www.financemagnates.com/forex/hong-kong-brokers-suspend-accounts-of-mainland-china-clients/” target=”_blank” rel=”follow”>started suspending clients’ accounts</a> from mainland China
in order to comply with China’s ban on international brokers that are offering
services without a local license. Both Hong Kong-listed Bright Smart Securities
and the Hong Kong unit of Chinese broker Guotai Junan Securities, issued
notices on the account suspension although the latter later withdrew the notice
from the public domain.</p><p>The move follows <a href=”https://www.financemagnates.com/forex/futu-and-up-fintech-face-regulatory-action-in-china/” target=”_blank” rel=”follow”>a warning issued by CSRC</a> against Futu Holding
and UP Fintech Holding (operating as Tiger Brokers), two popular Hong
Kong-registered online brokers that provide investors from mainland China
access to global stocks, to stop accepting new clients from mainland China.
This came as the Chinese regulator does not offer licenses to online brokerages
specializing in cross-border trades.</p><p>China <a href=”https://www.financemagnates.com/forex/regulation/futu-up-fintech-face-uncertainty-as-china-mulls-online-brokers-ban/” target=”_blank” rel=”follow”>started mulling over</a> banning online
brokers from engaging Chinese citizens in late 2021. In that year, Sun Tianqi,
Head of the Financial Stability Department of the People’s Bank of China, <a href=”https://www.financemagnates.com/forex/regulation/china-warns-unlicensed-brokers-accepting-mainland-clients/” target=”_blank” rel=”follow”>noted that</a> “cross-border online
brokerages are driving in China without a driver’s license [and are] conducting
illegal financial activities.” A year later, <a href=”https://www.financemagnates.com/forex/futu-and-up-fintech-face-regulatory-action-in-china/” target=”_blank” rel=”follow”>CSRC declared that</a> Futu and UP Fintech
were operating an unlawful securities business and will be asked to take
corrective measures.</p>
This article was written by Solomon Oladipupo at www.financemagnates.com.
