FUTU Holdings Ltd. and UP Fintech Holding Ltd., China’s two leading cross-border online brokerages, said Tuesday they decided to remove their trading platforms from app stores on the Chinese mainland.

The move was to comply with the Chinese securities regulator’s requirements on cross-border brokerage businesses, the two said. Futu’s app Futubull will be removed Friday and UP Fintech’ app will be taken off today.

Chinese regulators warned the two firms as early as 2021 that online brokerages not licensed on the mainland were acting illegally if they served mainland clients via the internet.

Existing clients on the mainland can continue to use the apps to make trades and users outside of the mainland won’t be affected, the brokers said.

Futu, backed by Chinese internet giant Tencent Holdings Ltd., and UP Fintech, also known as Tiger Brokers, have been operating in a gray area for their mainland businesses, allowing millions of mainland investors to evade capital controls to trade shares in markets such as Hong Kong and New York.

China has increased scrutiny of operations that could risk financial stability and national security in recent months.

“The actions on Futu and Tiger Brokers clearly show China’s grand agenda remains focused on financial security,” said Robert Lee, a Hong Kong lawmaker representing the financial services sector. “As long as one complies with the rule, it is still permitted to get Chinese mainland clients.”

Last December, the China Securities Regulatory Commission (CSRC) said Futu and UP Fintech had conducted unlawful securities business and banned them from soliciting new business from mainland investors.

The CSRC’s move followed similar criticism from a senior central bank official, who had questioned the legitimacy of online trading firms, calling their services “illegal” at least twice since 2021.

The criticism had prompted the companies to shift their focus away from the mainland market, with Tiger Brokers resorting to job cuts and Futu eyeing overseas markets to diversify its growth.

Futu also abruptly postponed its Hong Kong listing less than a day before its scheduled debut last year.

(SD-Agencies)