[DigitalToday reporter Jinju Hong (홍진주)] Greater China-focused Huaxing Securities has decided to restrict new transactions for mainland China clients.

Cryptopolitan, a blockchain media outlet, reported on June 6 local time that Huaxing Securities will halt new purchases and position openings for mainland China accounts from June 15 Beijing time. It will also block funds and securities inflows into the platform. Sales of existing holdings will be allowed.

The move shows that Chinese securities authorities' crackdown on offshore brokers is spreading across the industry beyond Futu Holdings (Futu), Tiger Brokers (Tiger) and Longbridge Securities (Longbridge). The China Securities Regulatory Commission began enforcement action against the three companies on May 22 and imposed total fines of 2.2 billion yuan for allegedly soliciting mainland investors without a licence to operate in China. Futu Holdings' share was estimated at about $271 million.

Futu Securities and Tiger Brokers later notified clients in China that they will not be able to open new positions from June 12. Huaxing Securities is applying the same restriction but set the start date as June 15. The CSRC has set a two-year grace period, and if the current schedule holds, the overhaul process will end in May 2028.

A key point is that Huaxing Securities was not directly included among the targets of the sanctions. In a customer notice, Huaxing Securities said the move was in line with "industry regulatory requirements during a two-year period of intensive rectification." That effectively means even small and mid-sized brokers not singled out by regulators are moving pre-emptively to restrict operations.

Huaxing Securities is a Hong Kong-based securities platform whose main clients are mainland China investors seeking to invest in overseas stocks. It does not disclose customer numbers or assets under custody at the level of listed firms such as Futu or Tiger, but the decision alone shows an industry-wide shift toward preparing for long-term regulatory scrutiny. Huaxing Securities said restrictions apply to transactions or fund transfer instructions that originate in the mainland regardless of account type. It said services for existing investors outside the mainland will be maintained and customer assets will be kept safe.

The market has already priced in regulatory risk. After the May 22 announcement, Futu Holdings and UP Fintech Holding, the parent of Tiger Brokers, fell more than 30 percent in U.S. premarket trading. In regular trading, Futu fell 26 percent in a day and Tiger Brokers dropped 23 percent. KraneShares CSI China Internet ETF, a China internet companies index ETF, and U.S.-listed Chinese stocks including Alibaba also weakened.

Investors' concerns go beyond a simple share-price shock. The Financial Times reported market reactions showing Chinese investors are worried they may not be able to access future investment opportunities such as SpaceX's planned initial public offering. Offshore brokers have effectively served as a major conduit into U.S. and Hong Kong stock markets.

Futu said in disclosed documents that as of the first quarter of 2026, mainland China clients accounted for about 13 percent of all customers who deposited funds. The crackdown is seen as more than sanctions against a handful of firms, and as a move to narrow overseas stock investment routes outside channels approved by authorities such as Stock Connect, Wealth Management Connect and the Qualified Domestic Institutional Investor scheme. Offshore investment is increasingly likely to be reshaped around these official channels.

In this situation, the market's focus is shifting to other brokers. If more firms join ahead of the June 12 and June 15 start dates, changes in how mainland China funds flow into overseas stocks appear unavoidable.