Hong Kong’s Securities and Futures Commission (SFC) has ordered Futu Securities International to freeze up to HK$125.25 million (approximately US$16.1 million) in client assets linked to suspected initial public offering fraud.
According to the regulator’s announcement, the accounts are held by an entity suspected of participating in a scheme intended to create a false or artificial appearance of demand for shares offered through an IPO.
The SFC did not identify the entity, the company conducting the offering, or whether the securities have already been listed.
Futu Is Not under Investigation
The regulator stressed that Futu is not the subject of its investigation. The restriction does not affect the broker’s operations or accounts belonging to its other clients.
Without the SFC’s prior written consent, Futu cannot trade, transfer, withdraw, dispose of, or otherwise process the affected assets up to the amount specified in the notice. The broker is also prohibited from helping another person deal with the assets.
Futu must immediately notify the regulator if it receives instructions concerning the restricted funds or securities.
“The SFC considers that the issue of the restriction notice is desirable in the interest of the investing public and in the public interest,” the watchdog stated. Its investigation remains ongoing.
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The order was issued under Sections 204 and 205 of Hong Kong’s Securities and Futures Ordinance. These provisions allow the SFC to restrict a licensed corporation’s handling of client assets while suspected misconduct is investigated.
Futu Securities International holds licenses covering seven categories of regulated activity in Hong Kong, including securities and futures dealing, leveraged foreign exchange trading, automated trading services, and asset management.
The brokerage is part of Nasdaq-listed Futu Holdings, which operates the Futubull and Moomoo investment platforms.
Not Futu’s First Client Account Freeze
This is not the first time the Hong Kong regulator has instructed Futu to restrict client accounts without accusing the broker of wrongdoing.
In 2021, the SFC ordered Futu and another local brokerage to freeze accounts linked to a suspected social media-driven pump-and-dump operation. That investigation concerned trading in two Hong Kong-listed companies.
The regulator also issued restrictions against Futu and two other brokers in 2019 over client accounts connected to suspected misconduct involving derivative warrants.
More recently, a restriction notice served on Futu on 25 June 2026 and published in the Hong Kong Government Gazette on 10 July covered HK$7.31 million held in a single client account.
Around the same time, the SFC published separate notices involving accounts at Webull Securities, Tiger Brokers, Longbridge, Valuable Capital, Winbull Securities, Hafoo Securities, and M&F Asset Management. The regulator has not publicly confirmed whether these earlier actions are connected to the suspected IPO scheme disclosed today.
New Hong Kong Order Follows China’s $271 Million Action
The Hong Kong restriction comes just over two months after Chinese regulators proposed a US$271 million penalty against Futu.
The China Securities Regulatory Commission alleged that Futu-related entities conducted securities brokerage, public fund sales, and futures business in mainland China without the required licenses or approvals.
Futu recorded the full proposed charge in its first-quarter accounts. Consequently, its quarterly net income dropped 61% to HK$831 million, even as revenue increased almost 25% and funded accounts rose to 3.59 million.
The penalty also triggered a sharp market reaction. Futu shares dropped 27.5% when the action was disclosed and remained around 50% below their late-2025 peak in early June. However, S&P maintained Futu’s investment-grade rating, citing its capitalization, position in Hong Kong, and expansion outside mainland China.
Futu was not alone in facing enforcement action. Chinese authorities also targeted Tiger Brokers and Longbridge as part of a wider campaign against offshore platforms serving mainland investors without domestic brokerage licenses.
Under the regulatory plan, existing mainland clients will have two years to sell their holdings and withdraw funds. As Finance Magnates Intelligence reported, Futu’s mainland customers represent approximately 13% of its funded accounts but about 20% of its revenue.
The mainland enforcement and the latest Hong Kong restriction concern different alleged conduct. Crucially, the SFC has explicitly stated that Futu itself is not a target of the suspected IPO fraud investigation.
