FUTU · Futu Holdings Limited

Futu Holdings Limited disclosed receipt of a Notice of Investigation and an Administrative Penalty Pre-Notification Letter from the China Securities Regulatory Commission (CSRC) and its Shenzhen bureau. The CSRC alleges that certain Futu entities in mainland China and Hong Kong conducted securities, public fund sales, and futures business without obtaining requisite licenses, violating China's Securities Law, Securities Investment Fund Law, and Futures and Derivatives Law. The proposed penalty includes confiscation of illegal gains and fines totaling approximately RMB1.85 billion (approximately USD271 million) against the Related Companies, and a personal fine of RMB1.25 million (approximately USD183,575) against CEO Leaf Hua Li. The CSRC proposes to order rectification or cessation of such activities. The Company is entitled to submit statements, present defenses, and request a hearing. Futu states it has maintained communication with the CSRC and implemented rectification measures. As of Q1 2026, funded accounts from mainland China represented approximately 13% of total funded accounts. International markets continue to grow, and operations outside mainland China remain normal. The outcome of the proceedings is uncertain, and the final penalty could be materially different. Investors should monitor for updates as the regulatory process unfolds.