China’s largest cross-border brokers plummeted in U.S. premarket trading after a central bank official questioned the legitimacy of their operations amid Beijing’s continuing crackdown on private enterprise.
These online brokers are engaged in "illegal financial activities” because they have no "driving licenses” to operate in China, Sun Tianqi, a senior People’s Bank of China official wrote in an article published on the website of Finance 40 Forum. Sun didn’t name the brokers, and added that calling them illegal has nothing to do China’s capital control rules.
Tencent Holdings Ltd.-backed Futu Holdings Ltd. tumbled as much as 31% in premarket trading while Xiaomi Corp.-backed Up Fintech Holding Ltd., known as Tiger Brokers, fell as much as 23%. Both stocks have soared since the firms went public in New York in 2019.