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SFC Forewarns Retail FX Brokers To Stay Away From Doing Business In China

Jun 18, 2019

Hong Kong brokers may target Mainland customers unlawfully. The Securities and Futures Commission (SFC) has recently published a statement warning brokers in relation to conducting business in mainland China.

The SFC pointed out that the Chinese State Administration of Foreign Exchange (SAFE) not long ago has prohibited a Mainland's China entities to get traders to deposit funds with brokers located outside of the country.

The Mainland regulator (SAFE) in its statement informed that due to the new requirements, it is unlawful for any unapproved organization to conduct forex margin trading or for any client, either an organization or individual from Mainland. The aforesaid financial regulator also adds that companies are advertising their services in simplified Chinese, as opposed to the local dialect used in Hong Kong as well as giving Chinese citizens the opportunity to call toll-free calls to people in Mainland China, are also being at risk.

Furthermore, some Hong Kong brokers are also allowing affiliates in Mainland China to promote their services. In some cases that has led these affiliates to attach an SFC logo to their websites and promo materials.

The companies are maintaining or marketing forex margin trading or similar services to Mainland clients or assisting other persons to provide or market them to Mainland customers should immediately review the legality of their activities under Mainland law and regulations. Any non-compliant activities should be discontinued immediately and be notified to the SFC. The SFC’s statement was remarkably similar to warnings issued by the Australian Securities and Investments Commission during the past months.

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