A Coordinated Regulatory Offensive Takes Shape

In a significant move to tighten oversight of cross-border financial activities, eight key Chinese regulatory bodies have joined forces. With State Council approval, the China Securities Regulatory Commission (CSRC), alongside ministries overseeing industry, public security, central banking, market regulation, financial supervision, cyberspace, and foreign exchange, has rolled out the “Implementation Plan for Comprehensive Rectification of Illegal Cross-Border Securities, Futures, and Fund Business Activities.” This marks a new phase of systematic and stringent crackdowns in this domain.

The Ultimate Goal: A Two-Year Cleanup Campaign

The Plan establishes a clear and ambitious objective: to completely eradicate the illegal cross-border operations of overseas securities, futures, and fund institutions within China's territory through a focused, two-year rectification campaign. The entire operation will adhere to the core principle of “resolutely banning illegal activities while prudently winding down existing ones,” aiming to stop new violations while orderly resolving accumulated risks.

Four Key Targets Across the Entire Chain

The scope of this crackdown is broad and precise, primarily focusing on four types of entities:

  • Overseas Operators: Foreign institutions conducting securities, futures, or fund businesses in China without proper authorization.
  • Domestic Facilitators: Local affiliates or partners within China that assist overseas institutions in their illegal cross-border operations.
  • Illegal Intermediaries: Organizations specifically engaged in illegally soliciting domestic investors.
  • Non-compliant Promotional Platforms: Internet platforms and social media accounts that publish information or promote these illegal activities.

A Two-Pronged Approach: Blocking New Business and Unwinding the Old

To achieve its goals, the Plan employs a dual strategy of “blocking the new” and “unwinding the old”:

1. Comprehensive Ban on New Illegal Activities: It explicitly prohibits overseas institutions from any form of business solicitation or marketing within China. Furthermore, it bans them from providing core trading services—such as account opening, trade order execution, and fund transfers—to investors within China, severing the channels for new business at the root.

2>Phased Wind-Down of Existing Business: A two-year concentrated rectification period is established to clean up existing illegal operations. During this window, overseas institutions are barred from providing new buy orders or accepting fund deposits from existing clients. The policy provides an “exit path” for current investors, allowing them to execute sell-only transactions and withdraw their funds, aiming to protect investor interests and ensure an orderly exit.

This series of coordinated measures underscores the regulators' firm resolve to safeguard financial market order and protect investor rights. It also draws a clear regulatory line for the standardized development of cross-border financial activities.