Recently, with approval from the State Council, eight government departments including the China Securities Regulatory Commission jointly issued the Implementation Plan for the Comprehensive Rectification of Illegal Cross-Border Securities, Futures, and Fund Operations. This plan aims to tackle all aspects of illegal activities involving overseas entities soliciting clients, offering account openings, and providing trading services within China without proper authorization. A two-year intensive rectification period has been set: during this time, such entities are prohibited from facilitating purchases or allowing fund transfers for existing Chinese investors; they may only permit one-way sales and fund withdrawals. Upon expiration of this period, they must completely shut down any Chinese-language websites, trading apps, and associated servers, and are barred from serving Chinese investors in any capacity. The scope of regulation encompasses marketing, account creation, trade execution, and fund transfers — with explicit stipulations stating that engaging in even one of these activities constitutes illegal securities operations.
Three main groups fall under scrutiny: overseas firms operating cross-border unlawfully; domestic affiliates or intermediaries aiding them; and online influencers disseminating tutorials or promotional content related to account openings. Each participating department has defined responsibilities: the CSRC leads overall efforts; the Ministry of Industry and Information Technology removes noncompliant apps; the Cyberspace Administration of China eliminates illicit online material; and the Ministry of Public Security investigates criminal violations. Initiated in December 2022, this new framework builds on prior initiatives to strengthen inter-agency coordination and cross-border regulatory cooperation. Investors are cautioned that disputes or losses arising from unauthorized overseas investments lack legal recourse domestically; legitimate alternatives include Stock Connect, QDII programs, and Cross-Border Wealth Link.