Futu Holdings Limited (NASDAQ: FUTU) received an investigation notice and administrative penalty pre-notification letter from the China Securities Regulatory Commission regarding its mainland China operations.

The CSRC alleges that certain Futu entities in mainland China and Hong Kong conducted securities business, public fund sales business and futures business in mainland China without obtaining required licenses or approval. The regulator states these activities violated the Securities Law, the Securities Investment Fund Law, and the Futures and Derivatives Law of the People's Republic of China.

The CSRC proposes to order the related companies to rectify or cease such activities, confiscate illegal gains, and impose fines totaling approximately RMB1.85 billion (approximately $271 million). The regulator also proposes a personal fine of RMB1.25 million (approximately $183,575) on Li Hua, the company's founder and CEO.

The proposed penalty remains subject to further proceedings and final determination by the CSRC. Futu stated it is entitled to submit statements, present defenses, and request a hearing. The company said it will cooperate with the CSRC and exercise its rights to protect shareholder interests.

According to the company, funded accounts from mainland China represented approximately 13% of total funded accounts at the end of the first quarter of 2026. The company stated that business operations in all regions outside mainland China remain normal, while overseas funded accounts continue to grow.

Futu operates digital investment platforms Futubull and Moomoo, providing trade execution, clearing, margin financing, securities lending, and wealth management services. The company also offers corporate services including IPO distribution and investor relations solutions.