Data Concerns Drag Down U.S.-Listed Chinese Brokers


Shares in

Futu Holdings Ltd.


FUTU -13.66%

and

Up Fintech Holding Ltd.


TIGR -3.30%

fell sharply, after Chinese language state media stated the nation’s tough new data-privacy laws would pose challenges for the brokerage companies.

The 2 on-line brokers, that are listed on the Nasdaq Inventory Market, stated they positioned a precedence on authorized compliance and defending buyer data.

In an article printed Thursday, Individuals.cn highlighted stricter guidelines for the cross-border transmission and use of investor information beneath China’s new legal guidelines, which take impact on Nov. 1. Individuals.cn is an internet site run by the Individuals’s Day by day, the Communist Get together’s flagship newspaper.

In U.S. buying and selling Thursday, American depositary receipts in Futu and Up Fintech fell 12% and 21%, respectively.

Shares in both companies have swung wildly this yr, as a wave of investor optimism buoyed Chinese language ADRs, earlier than being changed by gloom as Beijing pursued regulatory crackdowns on areas similar to e-commerce, non-public tuition and videogames. Futu’s ADRs have plunged 61% to $73.81 from a closing peak of $191 earlier this yr.

The duo stated that they had moved rapidly in 2019 to repair issues recognized by a activity power on app regulation and had extra just lately been learning the pending legislation on defending private data.

“We’ve all the time regarded authorized compliance because the lifeline of the group’s operations, and the agency attaches nice significance to private data safety and information safety,” Up Fintech stated.

Likewise, Futu stated it had all the time made information safety a precedence. “Futu has been strictly complying with related legal guidelines and rules. Going ahead, we’ll proceed to actively cooperate with regulatory authorities to higher safeguard private data,” it stated.

In August, Futu, which is backed by Chinese language gaming and social-media firm

Tencent Holdings Ltd.

, stated that it had simply over a million paying clients as of the top of June. Its buying and selling quantity for the three months to June greater than doubled to the equal of $167 billion.

Up Fintech, which makes use of the title Tiger Brokers within the Asia-Pacific area, had about 1.6 million buyer accounts, together with about 529,000 clients with deposits, as of the top of June.

Vehicles right this moment supply high-tech options and collect troves of knowledge to coach algorithms. As China steps up controls over new applied sciences, WSJ seems to be on the dangers for Tesla and different international manufacturers that are actually required to maintain information throughout the nation. Screenshot: Tesla China

Write to Anniek Bao at [email protected]

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