Hong Kong’s Securities and Futures Commission has ordered Futu Securities International to freeze HK$125.25 million in client assets tied to suspected IPO fraud. The restriction affects accounts held by an unnamed entity allegedly involved in artificially inflating demand for shares in an unidentified initial public offering. The SFC has not disclosed whether the securities have already been listed.
The regulator emphasized that Futu itself is not under investigation and the freeze does not impact the broker’s operations or other client accounts. Under the order, Futu cannot trade, transfer, withdraw or process the restricted assets without prior SFC approval. The broker must immediately report any instructions received concerning the frozen funds.
This marks the third time since 2019 that Hong Kong authorities have instructed Futu to restrict client accounts without alleging broker misconduct. Previous cases involved suspected pump-and-dump schemes and derivative warrant irregularities. Futu Securities holds seven regulated activity licenses and operates under Nasdaq-listed Futu Holdings.
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** Brokers using Futu platforms should verify their account status remains unaffected while monitoring for potential regulatory spillover affecting Hong Kong-listed IPO trading conditions.
Source: Finance Magnates