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China bans brokers from accepting new mainland clients for offshore trading

China has issued a new directive barring domestic brokerages and their foreign branches from accepting new mainland clients for offshore trading. The document, viewed by news agency Reuters, also mandates strict supervision of new investments by existing mainland clients to prevent evasion of China's foreign exchange controls. This clampdown, aimed at curbing capital outflows and stabilising the yuan, is a response to the challenges posed by the country's slowing economic growth. The China Securities Regulatory Commission’s Shanghai unit issued the notice on September 28, demanding the halt of securities trading from offshore accounts like Hong Kong for new mainland investors. Large brokers, including Citic Securities, CICC, and Haitong Securities, will be significantly impacted as their Hong Kong divisions heavily rely on offshore trading revenues.

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