Non-Bank Financials - China: China’s regulations that may impact cross-border retail business

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Non-Bank Financials - China: China’s regulations that may impact cross-border retail business

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Non-Bank Financials - China

China’s regulations that may impact cross-

border retail business

Industry Overview

China’s regulations that may impact cross-border business 09 June 2026

Given the recent focus on China’s regulation on online brokers and outbound investment Equity

we list below the potential risks that overseas financial institutions (with/without China China

licenses) may face when they conduct cross-border retail business. Non-Bank Financials

Everything starts from client acquisition MichaelResearch LiAnalyst>>

One of the reasons that online brokers have been penalized is that, after the initial Merrill+852 3508Lynch7381(Hong Kong)

warnings in 2023, regulators still find clues that online brokers directly/indirectly acquire m.li@bofa.com

domestic China clients through either offline client interaction or online social media Susie Liu, CFA >>

advertisement/propaganda. For those financial institutions without licenses in China, ResearchMerrill LynchAnalyst(Hong Kong)

client acquisition is deemed as illegal. Even for licensed foreign banks in China, cross- +852 3508 8456

susie.liu@bofa.com

border business is also regulated. For example, domestic China clients cannot buy HSBC

Emma Xu >>

HK products from HSBC China branches. Research Analyst

Merrill Lynch (Hong Kong)

Cannot manage portfolio from Mainland China +852emma.xu@bofa.com3508 8165

Managing portfolio of domestic Chinese customers, including stock trading, bank wealth Winnie Wu >>

management, insurance claims, from Mainland China is also prohibited, based on the Research Analyst

regulations on online brokers. Overseas financial institutions are not allowed to provide +852 3508 3058