On May 22nd, the China Securities Regulatory Commission (CSRC) announced it had rigorously investigated and dealt with cases involving the illegal cross-border business operations of institutions including Futu. In response, Futu Holdings Limited (FUTU.US) issued a statement confirming it had received a prior notice of administrative penalty from the CSRC and the Shenzhen Securities Regulatory Bureau regarding the company's securities business operations within the Chinese mainland. The notice states that relevant entities of Futu in the Chinese mainland and Hong Kong (referred to as "relevant entities") conducted related securities business, public fund sales business, and futures business within China without obtaining approval or the necessary licenses from the CSRC. This activity violated the Securities Law of the People's Republic of China, the Securities Investment Fund Law, and the Futures and Derivatives Law. The CSRC intends to order the relevant entities to rectify the situation, ban the illegal operations, confiscate illegal gains, and impose fines, with the total penalty amounting to approximately 1.85 billion yuan. Additionally, the CSRC intends to impose a personal fine of 1.25 million yuan on the company's founder and CEO, Mr. Li Hua. The company will engage in further communication with the CSRC regarding these proposed penalties, which will be subject to final adjudication by the CSRC. Futu stated it will actively cooperate with the CSRC's related work. The company has consistently maintained close communication with the CSRC and has implemented continuous rectification measures for its business within the Chinese mainland. As of the first quarter of 2026, clients with assets in the Chinese mainland accounted for approximately 13% of the company's total client base with assets. Meanwhile, as the company continues to expand in international markets, the number of overseas clients with assets has shown stable growth. The company's business operations in Hong Kong and other overseas markets remain normal.