On June 3, Futu Holdings fell 5.33% in regular trading, trading at $97.55/share, with trading volume of $98.09 million. The stock continues to face selling pressure in the wake of the China Securities Regulatory Commission's (CSRC) landmark enforcement action against cross-border internet brokerages.

The CSRC, along with eight other government departments, issued a comprehensive rectification plan targeting illegal cross-border securities operations. Futu was hit with approximately RMB 18.5 billion in penalties, including RMB 4.7 billion in disgorgement of illegal gains and RMB 13.8 billion in fines. The company's founder and CEO Li Hua also faces a personal fine of RMB 1.25 million. Futu disclosed that mainland China clients account for approximately 13% of funded accounts, 17% of total client assets, and 20% of total revenue — all of which face a two-year rectification period restricting onshore funding and new purchases.

Despite Q1 revenue growing 25% year-over-year to HK$5.86 billion, net income plunged over 61% after fully provisioning for the regulatory penalty. Excluding the one-time charge, adjusted net profit rose 35.8%.

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