Why Shares of Futu Holdings and Up Fintech Holding Are Down Today
Shares of two Chinese online brokerages traded down this morning after investors learned that the two companies could face substantial regulatory risk from a new law. Shares of Up Fintech Holding (NASDAQ: TIGR) traded down roughly 21%, while shares of Futu Holdings (NASDAQ: FUTU) traded down nearly 14%, as of 11:55 a.m. EDT.
Reuters reported that The People's Daily, the official news organization of the leadership of the Chinese Communist Party, said that the two brokerages, which enable Chinese citizens to invest in foreign stock markets such as those in the U.S., could face a regulatory crackdown from a new law about to go into effect in China on Nov. 1.
The Personal Information Protection Law will impose stricter regulations on how consumer data is sent outside the country. This, according to The People's Daily, could be problematic for Futu and Up Fintech, because these two companies do not have Chinese brokerage licenses.
Source Fool.com
