Hey everyone, Pete here. Waking up to some wild news about Moomoo, Tiger Brokers, and Longbridge. Let us break down what this China broker crackdown actually means for us in the community.
What is going on?
China regulators are bringing the hammer down on unauthorized offshore trading. Basically, mainland Chinese investors were using these platforms to bypass strict capital controls and catch the massive US stock market rally. The regulators are stepping in to close this loophole with some heavy penalties. New mainland accounts are completely halted. Existing mainland users have a 2 year transition period where they can only sell shares or withdraw funds.
Are Singapore and Malaysia users affected?
The short answer is No.
Here is the context:
We use local entities: If you are trading from Singapore or Malaysia, you are using separate regional entities fully regulated by local authorities like the MAS in Singapore or the Securities Commission in Malaysia.
Residency exemptions: This crackdown specifically targets mainland Chinese citizens moving money out of China. If you are not a mainland Chinese, these mainland rules do not apply to you at all.
Tax perks: On a positive note, this highlights how good we have it. If you are trading from Malaysia, you still enjoy 0% capital gains tax on overseas stocks. Same goes for us here in Singapore.
Market Impact
While our personal trading accounts are completely fine, the parent companies took a beating. Shares of Futu and TIGR dropped over 30% on the news since they are taking a financial hit and losing a chunk of their mainland user base.
Keep calm, stick to the strategy, and let the market do its thing. I will continue to update in my official Telegram channel - t.me/realinvestwithpete
Happy Hunting!
Pete
Invest with Pete
🚨‼️ By the way, I’ll never PM anyone on telegram or any other social media platforms. If you receive any “Pete” messaging you, these are scammers impersonating me. Pls beware!
The information provided in this newsletter is for informational purposes only and does not constitute financial advice. Readers should seek their own independent financial advice before making any investment decisions. Please note that while Pete is a portfolio manager, the opinions expressed in this newsletter are his own and do not represent the views of any organization. Always perform your own research and due diligence before investing.
