CSRC and Seven Agencies Launch Two-Year Crackdown on Illegal Cross-Border Securities and Futures Operations

The China Securities Regulatory Commission (CSRC) announced on May 22 that eight government departments have jointly issued an Implementation Plan for Comprehensive Rectification of Illegal Cross-Border Securities, Futures and Fund Business Activities.

The plan aims to completely ban illegal cross-border operations by overseas institutions within a two-year intensive rectification period, achieving the goal of decisive elimination of illegal activity and orderly wind-down of existing positions.

Scope of Rectification

Targets include: overseas institutions conducting illegal cross-border securities, futures and fund business; domestic entities that assist such operations; illegal intermediaries recruiting mainland investors; and internet platforms and social media accounts that publish unlawful information. In addition to the securities-specific violations, the plan also covers breaches of foreign exchange administration regulations, anti-money laundering rules, cybersecurity and information management laws, and personal data protection requirements.

Key Prohibitions

Overseas institutions are prohibited from conducting marketing and solicitation activities for securities, futures or fund-related services within mainland China, and from providing account-opening, order-processing, or fund transfer services to mainland investors. Domestic entities are banned from assisting overseas institutions in illegal marketing or trading, or from providing website development, trading software, or customer service support on their behalf.

Transitional Arrangements for Existing Positions

A two-year rectification window has been established. During this period, overseas institutions are prohibited from accepting new buy orders or inbound fund transfers from existing mainland clients, only sell-side transactions and outbound fund transfers will be permitted. Upon expiry, overseas institutions must fully shut down their mainland-facing websites, trading platforms and support services.

The plan also establishes a standing cross-agency coordination mechanism for ongoing monitoring, intelligence-sharing, and enforcement actions targeting illegal cross-border financial activities.