Futu Receives CSRC Probe Notice, Faces Proposed RMB 1.85 Billion Penalty

Futu Holdings (FUTU.O) said it has received an investigation notice and a preliminary administrative penalty notice from the China Securities Regulatory Commission (CSRC) and the CSRC's Shenzhen office. According to the regulator, certain Futu entities in mainland China and Hong Kong allegedly carried out securities brokerage, public fund distribution and futures-related business in mainland China without the required licenses or approvals. The CSRC said the suspected conduct violates the Securities Law, the Securities Investment Fund Law and the PRC Futures and Derivatives Law. The CSRC plans to order the relevant companies to rectify or halt the activities, confiscate illicit gains and levy fines. The proposed total monetary penalty is about RMB 1.85 billion (roughly USD 271 million). The regulator also intends to fine the company's founder and CEO Li Hua RMB 1.25 million (about USD 183,575). Futu said the penalties remain subject to further procedures and the CSRC's final decision.