Online brokers can't offer offshore trading in China

Chinese officials are planning to ban online brokerages such as Futu Holdings Ltd and UP Fintech Holding Ltd from offering offshore trading services to mainland clients, the latest development in a broad regulatory crackdown that has roiled a wide range of sectors over the past year.

The Nasdaq-listed Chinese firms are two of the biggest players in the sector and a ban would block millions of retail investors in mainland China from trading securities easily in markets such as the United States and Hong Kong. Conce­rns over data security and capital outflows are driving the potential ban, sources said.

The looming restrictions come on the heels of a clampdown that has seen authorities tighten restrictions on a broad scope of companies over the past year, in sectors ranging from technology to education and real estate. Firms affected by the latest crackdown are likely to be notified of a ban in "the coming months", a source said.