Futu's Stance on Regulatory Evolution: Balancing Compliance and Growth
During a recent earnings conference, Futu Holding's founder Li Hua provided detailed insights into the latest regulatory developments concerning cross-border securities services. He clarified that the updated rules, issued by relevant authorities, represent a unified framework for the entire industry rather than targeting any single firm.
Understanding the New Rules: Regulation, Not Elimination
Li Hua emphasized that the two-year adjustment period for mainland-based clients focuses on standardizing operational processes—specifically limiting domestic fund deposits and security purchases—rather than mandating account closures. This clarification aims to manage market expectations and prevent misinterpretation.
Futu's Proactive Compliance Measures and Client Profile
Futu has already implemented several compliance initiatives:
- Completely halted new account openings for mainland-identified clients
- Strengthened account review processes, rejecting tens of thousands of non-compliant applications over the past two years
- Established ongoing compliance monitoring and evaluation systems
Currently, mainland clients account for approximately 17% of total client assets and contribute about 20% of revenue. This segment will be adjusted in line with the new regulatory framework.
Future Outlook: Accelerating Global Expansion
Despite regulatory changes, Li Hua expressed confidence in the company's trajectory. He projected that the updates would not materially impact Futu's goal of acquiring 800,000 new clients this year. Looking ahead, Futu plans to deepen its global presence by entering additional international markets, thereby diversifying its geographic footprint and enhancing overall resilience.
In conclusion, Li Hua reiterated that compliance forms the foundation for sustainable growth. Futu remains committed to adhering to regulatory guidelines while steadily advancing its business and seizing opportunities in global markets.