Recently, eight Chinese authorities, including the China Securities Regulatory Commission (CSRC), jointly issued the "Implementation Plan for Comprehensive Rectification of Illegal Cross-Border Securities, Futures, and Fund Business Activities." Relevant department heads answered reporters' questions regarding the "Rectification Plan."

The overall objective of the Rectification Plan is to completely eliminate the illegal cross-border business activities of overseas securities, futures, and fund operating institutions (referred to as overseas institutions) after a two-year intensive rectification period, achieving the goal of "resolutely banning illegal activities and prudently clearing existing stock."

Firstly, the targets of rectification include overseas institutions illegally conducting cross-border securities, futures, and fund businesses; domestic affiliated or cooperating entities assisting overseas institutions in illegal cross-border operations; illegal intermediaries soliciting domestic investors; and internet platforms and online self-media that illegally publish information. The illegal cross-border business activities of overseas institutions will be banned according to law, and actions by related entities violating laws and regulations on foreign exchange management, anti-money laundering, cybersecurity and information management, and personal information protection will also be included in the rectification scope.

Secondly, measures to ban illegal cross-border activities include prohibiting overseas institutions from conducting marketing and solicitation activities related to securities, futures, and fund businesses within China, as well as providing related account opening, transaction instruction processing, and fund transfer services. Domestic entities are prohibited from assisting overseas institutions in illegal marketing and transaction services, or providing them with websites, trading software development and operation, and customer service support.

Thirdly, measures to clear illegal existing business involve setting a two-year intensive rectification period. During this period, overseas institutions are prohibited from illegally providing services such as buy transactions and fund transfers for existing investors within China, only allowing one-way sell transactions and fund withdrawals. After the intensive rectification period ends, overseas institutions must completely shut down their domestic websites, trading software, and supporting services, and are prohibited from illegally providing transaction services to existing investors within China.

The Rectification Plan outlines the main tasks: First, establish a normalized collaborative supervision mechanism, conduct comprehensive monitoring and screening, report major problem clues, and promptly clean up and dispose of internet platforms, advertisements, and information related to illegal cross-border operations. Second, hold talks with overseas institutions engaged in illegal cross-border operations to urge strict compliance with rectification requirements. Inspections and investigations will be conducted on institutions involved in illegal cross-border activities, and entities suspected of crimes will be subject to criminal investigation. Efforts will be made to properly handle the divestiture of illegal domestic business operations. Third, hold talks with domestic banks providing account services for domestic investors engaged in illegal cross-border securities, futures, and fund investments, supervise domestic banks to strengthen compliance reviews of foreign exchange fund outflows, and crack down on illegal cross-border fund outflow channels such as underground banks. Fourth, strengthen cross-border regulatory cooperation, protect the property safety of domestic investors, and properly handle investor complaints. Public education, risk warnings, and policy guidance will be enhanced. Fifth, improve the regulatory system and guide domestic investors to conduct overseas investments through legal channels.

Next, the CSRC will work with relevant departments and local governments to steadily and orderly advance the rectification work, strengthen cooperation with overseas financial regulatory authorities, strictly investigate and punish illegal institutions, resolutely curb the risks of illegal cross-border financial activities, and effectively protect the property safety of investors.