UP Fintech (Nasdaq: TIGR), the operator of Tiger Brokers, announced on Friday the completion of the acquisition of Ocean Joy Securities Limited, which holds Type 1 and Type 2 licenses from the Hong Kong securities market regulator.
The Type 1 license allows Hong Kong companies to deal in securities, whereas they can deal in futures contracts with the Type 2 license.
After the latest acquisition, UP Fintech is expected to start operating brokerage business in the Chinese autonomous administrative territory.
Backlash from China
The deal has been closed when the Tiger Brokers operator is facing a setback due to the Chinese central bank’s latest stance against online brokers. A top official from the People’s Bank of China (PBoC) recently said that locally unlicensed brokerages taking clients from mainland China are operating illegally.
Though the official did not mention the name of any brokers, platforms like Tiger Broker and Futu are the obvious targets. These online brokers are licensed in overseas jurisdictions and provide mainland Chinese clients access to global stock markets.
Additionally, the remarks created panic in the markets, resulting in the plunge of UP Fintech stocks by more than 17 percent by the close of Thursday.
Moreover, these overseas brokers with extensive Chinese operations are facing challenges with the country’s upcoming data laws that will put heavy restrictions on sharing of the personal data of Chinese clients with foreign companies and even regulators.
Meanwhile, the Singapore-based subsidiary of UP Fintech recently received approval to be admitted as a CDP Depository Agent. Earlier, it gained in-principle approval from Singapore Exchange Securities Trading Limited (SGX) and Singapore Exchange Derivatives Trading Limited.
