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What changed in Futu Holdings Ltd's 20-F — 2023 vs 2024

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Paragraph-level year-over-year comparison of Futu Holdings Ltd's 2023 and 2024 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+682 added−646 removedSource: 20-F (2025-04-14) vs 20-F (2024-04-24)

Top changes in Futu Holdings Ltd's 2024 20-F

682 paragraphs added · 646 removed · 542 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

128 edited+21 added−23 removed727 unchanged
Biggest changeRisks Related to Our Operations in China ● Changes in social conditions, political and economic policies of the PRC government may materially and adversely affect our business, financial condition and results of operations and may result in our inability to sustain our growth and expansion strategies. ● The approval of and/or the filing with the CSRC or other PRC governmental authorities may be required under PRC law in connection with our future offshore offering or listing of securities on a different market and if required, we cannot predict whether or how soon we will be able to obtain such approval or complete such filing. ● There are uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations. ● The trade war between United States and China, and on a larger scale internationally, may dampen growth in China and other markets where the majority of our clients reside, and our activities and results of operations may be negatively impacted. ● The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections of our auditor in the past has deprived our investors with the benefits of such inspections. ● The ADSs may be delisted and prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China, which will materially and adversely affect the value of your investment. ​ 20 Table of Contents Risks Related to Our Corporate Structure ● We depend on the Contractual Arrangements to operate a part of our business in China and to hold the necessary licenses for our operations, which may not be as effective as ownership in providing us with the ability to direct the activities of the Consolidated Affiliated Entities and otherwise may have a material adverse effect as to our business. ● If the PRC government deems that the Contractual Arrangements do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations. ● The shareholders of the VIEs in China may have potential conflicts of interest with us, which may materially and adversely affect our business and financial condition. ● If we exercise the option to acquire equity ownership of the VIEs, the ownership transfer may subject us to certain limitations and substantial costs.
Biggest changeOur shares or ADSs may be prohibited from being traded on a national securities exchange or in the over-the-counter trading market in the United States, which will materially and adversely affect the value of your investment. ● If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely our auditor, we and our investors would be deprived of the benefits of such inspections. ● The ADSs may be delisted and prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China, which will materially and adversely affect the value of your investment. 21 Table of Contents Risks Related to Our Corporate Structure ● We depend on the Contractual Arrangements to operate a part of our business in China and to hold the necessary licenses for our operations, which may not be as effective as ownership in providing us with the ability to direct the activities of the Consolidated Affiliated Entities and otherwise may have a material adverse effect as to our business. ● If the PRC government deems that the Contractual Arrangements do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations. ● The shareholders of the VIEs in China may have potential conflicts of interest with us, which may materially and adversely affect our business and financial condition. ● If we exercise the option to acquire equity ownership of the VIEs, the ownership transfer may subject us to certain limitations and substantial costs.
As announced by the CSRC on December 30, 2022, the CSRC has initiated inquiries on us regarding our cross-border operations in Mainland China, including the provision of cross-border securities services for domestic, China-based investors. We have taken and may continue to take rectification measures based on our communication with or the requirements from the CSRC.
As announced by the CSRC on December 30, 2022, the CSRC has initiated inquiries on us regarding our cross-border operations in Mainland China, including the provision of cross-border securities services for domestic, China-based investors. We have taken and may continue to take rectification measures based on our communication with or the requirements from the CSRC.
As announced by the CSRC on December 30, 2022, the CSRC has initiated inquiries on us regarding our cross-border operations in Mainland China, including the provision of cross-border securities business services for domestic, China-based investors. We have taken and may continue to take rectification measures on our business based on the requirements from the CSRC.
As announced by the CSRC on December 30, 2022, the CSRC has initiated inquiries on us regarding our cross-border operations in Mainland China, including the provision of cross-border securities business services for domestic, China-based investors. We have taken and may continue to take rectification measures on our business based on the requirements from the CSRC.
In response to the CSRC rectification requirements, we have removed our Futubull app from app stores in Mainland China since May 19, 2023. However, there can be no assurance that our rectification measures would fully meet the requirements from the CSRC.
In response to the CSRC rectification requirements, we have removed our Futubull app from app stores in Mainland China since May 19, 2023. However, there can be no assurance that our rectification measures would fully meet the requirements from the CSRC.
Declines in trading volume generally result in lower revenues from trade execution services, which may affect our financial condition, results of operations and prospects.
Declines in trading volume generally result in lower revenues from trade execution services, which may affect our financial condition, results of operations and prospects.
For securities including stocks, options and futures traded on the major exchanges in the U.S., the Singapore Exchange and the Australian Securities Exchange, we aggregate trade instructions from clients and collaborate with qualified local third-party clearing brokers for execution and settlement.
For securities including stocks, options and futures traded on major exchanges in the U.S., the Singapore Exchange and the Australian Securities Exchange, we aggregate trade instructions from clients and collaborate with qualified local third-party clearing brokers for execution and settlement.
The market price for the ADSs may continue to be volatile and subject to wide fluctuations in response to factors including, but not limited to, the following: ● regulatory developments affecting us or our industry or China-based companies in general; ● adverse market rumors, speculations, media reports or other negative publicity involving us or our industry or China-based companies in general, some of which may be unsubstantiated or inaccurate; ● announcements of studies and reports relating to the quality of our credit offerings or those of our competitors; ● changes in the economic performance or market valuations of other financial service providers; ● actual or anticipated fluctuations in our quarterly results of operations and changes or revisions of our expected results; ● changes in financial estimates by securities research analysts; ● conditions in the market for financial services; 71 Table of Contents ● announcements by us or our competitors of new product and service offerings, acquisitions, strategic relationships, joint ventures, capital raisings or capital commitments; ● additions to or departures of our senior management; ● fluctuations of exchange rates between the Renminbi and the U.S. dollar; ● release or expiry of contractual lock-up or other transfer restrictions on our outstanding shares or the ADSs; and ● sales or perceived potential sales of additional ordinary shares or ADSs.
The market price for the ADSs may continue to be volatile and subject to wide fluctuations in response to factors including, but not limited to, the following: ● regulatory developments affecting us or our industry or China-based companies in general; ● adverse market rumors, speculations, media reports or other negative publicity involving us or our industry or China-based companies in general, some of which may be unsubstantiated or inaccurate; ● announcements of studies and reports relating to the quality of our credit offerings or those of our competitors; ● changes in the economic performance or market valuations of other financial service providers; ● actual or anticipated fluctuations in our quarterly results of operations and changes or revisions of our expected results; ● changes in financial estimates by securities research analysts; ● conditions in the market for financial services; 72 Table of Contents ● announcements by us or our competitors of new product and service offerings, acquisitions, strategic relationships, joint ventures, capital raisings or capital commitments; ● additions to or departures of our senior management; ● fluctuations of exchange rates between the Renminbi and the U.S. dollar; ● release or expiry of contractual lock-up or other transfer restrictions on our outstanding shares or the ADSs; and ● sales or perceived potential sales of additional ordinary shares or ADSs.
Factors which may adversely affect our liquidity position include having temporary liquidity demands due to timing differences between brokerage transaction settlements and the availability of segregated cash balances, unanticipated outflows of company cash, fluctuations in cash held in banking or brokerage client trading accounts, a dramatic increase in clients’ margin-financing activities, increased capital requirements, changes in regulatory guidance or interpretations, other regulatory changes, or a loss of market or client confidence.
Factors which may adversely affect our liquidity position include having temporary liquidity demands due to timing differences between brokerage transaction settlements and the availability of segregated cash balances, unanticipated outflows of company cash, fluctuations in cash held in banking or brokerage client brokerage accounts, a dramatic increase in clients’ margin-financing activities, increased capital requirements, changes in regulatory guidance or interpretations, other regulatory changes, or a loss of market or client confidence.
According to SAT Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having its “de facto management body” in China and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) the primary location of the day-to-day operational management is in the PRC; (ii) decisions relating to the enterprise’s financial and human resource matters are made or are subject to approval by organizations or personnel in the PRC; (iii) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder resolutions, are located or maintained in the PRC; and (iv) at least 50% of board members with voting rights or senior executives habitually reside in the PRC. 60 Table of Contents We believe that our Cayman Islands holding company, Futu Holdings, is not a PRC resident enterprise for PRC tax purposes.
According to SAT Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having its “de facto management body” in China and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) the primary location of the day-to-day operational management is in the PRC; (ii) decisions relating to the enterprise’s financial and human resource matters are made or are subject to approval by organizations or personnel in the PRC; (iii) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder resolutions, are located or maintained in the PRC; and (iv) at least 50% of board members with voting rights or senior executives habitually reside in the PRC. 61 Table of Contents We believe that our Cayman Islands holding company, Futu Holdings, is not a PRC resident enterprise for PRC tax purposes.
Further, if our corporate structure and the Contractual Arrangements are found to be in violation of any existing or future PRC laws or regulations or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future, the relevant regulatory authorities would have broad discretion in dealing with such violations, including: ​ 67 Table of Contents ● revoking our business and operating licenses; ● levying fines on us; ● confiscating any of our income that they deem to be obtained through illegal operations; ● shutting down our services; ● discontinuing or restricting our operations in China; ● imposing conditions or requirements with which we may not be able to comply; ● requiring us to change our corporate structure and the Contractual Arrangements, including terminating the Contractual Arrangements and deregistering the equity pledges of the VIEs, which in turn would affect our ability to consolidate the VIEs or direct the activities of the VIEs; ● restricting or prohibiting our use of the proceeds from overseas offering to finance the VIEs’ business and operations; and ● taking other regulatory or enforcement actions that could be harmful to our business.
Further, if our corporate structure and the Contractual Arrangements are found to be in violation of any existing or future PRC laws or regulations or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future, the relevant regulatory authorities would have broad discretion in dealing with such violations, including: ● revoking our business and operating licenses; 68 Table of Contents ● levying fines on us; ● confiscating any of our income that they deem to be obtained through illegal operations; ● shutting down our services; ● discontinuing or restricting our operations in China; ● imposing conditions or requirements with which we may not be able to comply; ● requiring us to change our corporate structure and the Contractual Arrangements, including terminating the Contractual Arrangements and deregistering the equity pledges of the VIEs, which in turn would affect our ability to consolidate the VIEs or direct the activities of the VIEs; ● restricting or prohibiting our use of the proceeds from overseas offering to finance the VIEs’ business and operations; and ● taking other regulatory or enforcement actions that could be harmful to our business.
There also remains a risk that we may not be able to rectify our practices to be in compliance with relevant HK Brokerage Regulations following the identification of any such misconduct, deficiency or material non-compliance, which may result in the HK SFC taking additional regulatory actions against us in the forms described above.
In such circumstances there also remains a risk that we may not be able to rectify our practices to be in compliance with relevant HK Brokerage Regulations following the identification of any such misconduct, deficiency or material non-compliance, which may result in the HK SFC taking additional regulatory actions against us in the forms described above.
However, if the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in Mainland China and Hong Kong, and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we and investors in the ADSs would be deprived of the benefits of such PCAOB inspections again, which could cause investors and potential investors in the ADSs to lose confidence in our audit procedures and reported financial information and the quality of our financial statements. 64 Table of Contents The ADSs may be delisted and prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China, which will materially and adversely affect the value of your investment.
However, if the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in Mainland China and Hong Kong, and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we and investors in the ADSs would be deprived of the benefits of such PCAOB inspections again, which could cause investors and potential investors in the ADSs to lose confidence in our audit procedures and reported financial information and the quality of our financial statements. 65 Table of Contents The ADSs may be delisted and prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China, which will materially and adversely affect the value of your investment.
Major risks involving our network infrastructure include: ● breakdowns or system failures resulting in a prolonged shutdown of our servers; ● disruption or failure in the national backbone networks in China, which would make it impossible for users and clients to access our online and mobile platforms; ● physical or cyber based attacks on our servers and other network infrastructure, which may result in disruptions to our network and damages to our technology infrastructure; ● damage from natural disasters or other catastrophic events such as typhoon, volcanic eruption, earthquake, flood, telecommunications failure, or other similar events; and ● any infection by or spread of computer viruses or other system failures. ​ 37 Table of Contents In addition, any network interruptions or inadequacy on the part of our third-party partners may result in disruptions to the services we provide to our users and clients.
Major risks involving our network infrastructure include: ● breakdowns or system failures resulting in a prolonged shutdown of our servers; ● disruption or failure in the national backbone networks in China, which would make it impossible for users and clients to access our online and mobile platforms; ● physical or cyber based attacks on our servers and other network infrastructure, which may result in disruptions to our network and damages to our technology infrastructure; ● damage from natural disasters or other catastrophic events such as typhoon, volcanic eruption, earthquake, flood, telecommunications failure, or other similar events; and ● any infection by or spread of computer viruses or other system failures. 38 Table of Contents In addition, any network interruptions or inadequacy on the part of our third-party partners may result in disruptions to the services we provide to our users and clients.
Under the deposit agreement for the ADSs, if you do not give instructions for voting the Class A ordinary shares underlying your ADSs, the depositary will give us a discretionary proxy to vote those Class A ordinary shares at the shareholders’ meeting if: ● we have timely instructed the depositary to disseminate a notice of meeting and provided the depositary with a notice of meeting and related voting materials; ● we have instructed the depositary that we wish a discretionary proxy to be given; ● we have informed the depositary that as of the instruction date we reasonably don’t know of any substantial opposition as to a matter to be voted on at the meeting; and ● a matter to be voted on at the meeting would not have a material adverse impact on shareholders’ interests. 74 Table of Contents The effect of this discretionary proxy is that you cannot prevent our Class A ordinary shares underlying your ADSs from being voted at the shareholders’ meeting if the circumstances described above are met.
Under the deposit agreement for the ADSs, if you do not give instructions for voting the Class A ordinary shares underlying your ADSs, the depositary will give us a discretionary proxy to vote those Class A ordinary shares at the shareholders’ meeting if: ● we have timely instructed the depositary to disseminate a notice of meeting and provided the depositary with a notice of meeting and related voting materials; ● we have instructed the depositary that we wish a discretionary proxy to be given; ● we have informed the depositary that as of the instruction date we reasonably don’t know of any substantial opposition as to a matter to be voted on at the meeting; and ● a matter to be voted on at the meeting would not have a material adverse impact on shareholders’ interests. 75 Table of Contents The effect of this discretionary proxy is that you cannot prevent our Class A ordinary shares underlying your ADSs from being voted at the shareholders’ meeting if the circumstances described above are met.
However, since the PRC authorities and the commercial banks designated by the SAFE to conduct currency exchange services have significant amount of discretion in interpreting, implementing and enforcing the relevant currency exchange rules and regulations, and for many other factors that are beyond our control, we may be subject to further regulatory requirements, including but not limited to verifying evidence of approval from relevant authorities with respect to the foreign currency exchange. 62 Table of Contents China’s M&A Rules and certain other PRC regulations establish complex procedures for certain acquisitions of PRC companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in China.
However, since the PRC authorities and the commercial banks designated by the SAFE to conduct currency exchange services have significant amount of discretion in interpreting, implementing and enforcing the relevant currency exchange rules and regulations, and for many other factors that are beyond our control, we may be subject to further regulatory requirements, including but not limited to verifying evidence of approval from relevant authorities with respect to the foreign currency exchange. 63 Table of Contents China’s M&A Rules and certain other PRC regulations establish complex procedures for certain acquisitions of PRC companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in China.
Business Overview—Regulation—Overview of the Laws and Regulations Relating to Our Business and Operations in Singapore.” Futu Australia, which holds an Australian Financial Services License, is regulated by the Australian Securities and Investments Commission. Moomoo Securities Japan, which holds the Financial Instruments Business Operators (FIBO) license, is regulated by local regulators including the Financial Services Agency.
Business Overview—Regulation—Overview of the Laws and Regulations Relating to Our Business and Operations in Singapore.” Moomoo Securities Australia, which holds an Australian Financial Services License, is regulated by the Australian Securities and Investments Commission. Moomoo Securities Japan, which holds the Financial Instruments Business Operators (FIBO) license, is regulated by local regulators including the Financial Services Agency.
As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by our management, members of our board of directors or our controlling shareholders than they would as public shareholders of a company incorporated in the United States. 77 Table of Contents Our amended and restated memorandum and articles of association contain anti-takeover provisions that could discourage a third party from acquiring us, which could limit our shareholders’ opportunity to sell their shares, including Class A ordinary shares represented by the ADSs, at a premium.
As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by our management, members of our board of directors or our controlling shareholders than they would as public shareholders of a company incorporated in the United States. 78 Table of Contents Our amended and restated memorandum and articles of association contain anti-takeover provisions that could discourage a third party from acquiring us, which could limit our shareholders’ opportunity to sell their shares, including Class A ordinary shares represented by the ADSs, at a premium.
If our online client onboarding procedures are determined by the HK SFC to be, or have been, not in compliance with the applicable laws, regulations, guidelines, circulars and other regulatory guidance, we may be subject to regulatory actions, which may include, in addition to remediation, reprimands, fines, limitations or prohibitions on our future business activities and/or suspension or revocation of Futu Securities’ licenses and trading rights. 25 Table of Contents We do not hold any license or permit for providing securities brokerage services in Mainland China.
If our online client onboarding procedures are determined by the HK SFC to be, or have been, not in compliance with the applicable laws, regulations, guidelines, circulars and other regulatory guidance, we may be subject to regulatory actions, which may include, in addition to remediation, reprimands, fines, limitations or prohibitions on our future business activities and/or suspension or revocation of Futu Securities’ licenses and trading rights. 26 Table of Contents We do not hold any license or permit for providing securities brokerage services in Mainland China.
If these third-party distribution platforms change their terms and conditions in a manner that is detrimental to us, or refuse to distribute our application, or if any other major distribution channel with which we would like to seek collaboration refuses to collaborate with us in the future, our business, financial condition and results of operations may be materially and adversely affected. 39 Table of Contents We have not obtained licenses from relevant PRC regulatory authorities in connection with some of the information and services available on our platform.
If these third-party distribution platforms change their terms and conditions in a manner that is detrimental to us, or refuse to distribute our application, or if any other major distribution channel with which we would like to seek collaboration refuses to collaborate with us in the future, our business, financial condition and results of operations may be materially and adversely affected. 40 Table of Contents We have not obtained licenses from relevant PRC regulatory authorities in connection with some of the information and services available on our platform.
Any prolonged slowdown in the Chinese economy may reduce the demand for our products and services and materially and adversely affect our business and results of operations. ​ 54 Table of Contents The new, stricter regulations or interpretations of existing regulations imposed by the central or local governments may require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations, and if relevant regulations are issued and become effective in a short notice, we may not be able to take the required actions in a timely manner without allocating significant resource.
Any prolonged slowdown in the Chinese economy may reduce the demand for our products and services and materially and adversely affect our business and results of operations. 55 Table of Contents The new, stricter regulations or interpretations of existing regulations imposed by the central or local governments may require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations, and if relevant regulations are issued and become effective in a short notice, we may not be able to take the required actions in a timely manner without allocating significant resource.
If dividends payable to our non-PRC investors, or gains from the transfer of the ADSs or Class A ordinary shares by such investors, are deemed as income derived from sources within the PRC and thus are subject to PRC tax, the value of your investment in the ADSs or Class A ordinary shares may decline significantly. 61 Table of Contents We and our shareholders face uncertainties with respect to indirect transfers of equity interests in PRC resident enterprises or other assets attributed to a Chinese establishment of a non-PRC company, or immovable properties located in China owned by non-PRC companies.
If dividends payable to our non-PRC investors, or gains from the transfer of the ADSs or Class A ordinary shares by such investors, are deemed as income derived from sources within the PRC and thus are subject to PRC tax, the value of your investment in the ADSs or Class A ordinary shares may decline significantly. 62 Table of Contents We and our shareholders face uncertainties with respect to indirect transfers of equity interests in PRC resident enterprises or other assets attributed to a Chinese establishment of a non-PRC company, or immovable properties located in China owned by non-PRC companies.
See “—Our risk management policies and procedures may not be fully effective in identifying or mitigating risk exposure in all market environments or against all types of risks, and as a result, our business operations and financial conditions may be adversely affected.” ​ 34 Table of Contents Moreover, the growth and success of our margin financing, securities lending, IPO loans, and stock-pledged loan businesses depend on the availability of adequate funding to meet our client demand for loans through our platforms.
See “—Our risk management policies and procedures may not be fully effective in identifying or mitigating risk exposure in all market environments or against all types of risks, and as a result, our business operations and financial conditions may be adversely affected.” 35 Table of Contents Moreover, the growth and success of our margin financing, securities lending, IPO loans, and stock-pledged loan businesses depend on the availability of adequate funding to meet our client demand for loans through our platforms.
Management of operational, legal and regulatory risks requires, among other things, policies and procedures to properly record and verify a large number of transactions and events, and these policies and procedures may not be fully effective in mitigating our risk exposure in all market environments or against all types of risks. 48 Table of Contents From time to time we may evaluate and potentially consummate investments and acquisitions or enter into alliances, which may require significant management attention, disrupt our business and adversely affect our financial results.
Management of operational, legal and regulatory risks requires, among other things, policies and procedures to properly record and verify a large number of transactions and events, and these policies and procedures may not be fully effective in mitigating our risk exposure in all market environments or against all types of risks. 49 Table of Contents From time to time we may evaluate and potentially consummate investments and acquisitions or enter into alliances, which may require significant management attention, disrupt our business and adversely affect our financial results.
As a result, you may not be afforded the same protections or information that would be made available to you were you investing in a U.S. domestic issuer. 78 Table of Contents As a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the Nasdaq listing standards; these practices may afford less protection to shareholders than they would enjoy if we complied fully with the Nasdaq listing standards.
As a result, you may not be afforded the same protections or information that would be made available to you were you investing in a U.S. domestic issuer. 79 Table of Contents As a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the Nasdaq listing standards; these practices may afford less protection to shareholders than they would enjoy if we complied fully with the Nasdaq listing standards.
If either VIE undergoes voluntary or involuntary liquidation proceeding, unrelated third-party creditors may claim rights to some or all of these assets, thereby hindering our ability to operate our business, which could materially and adversely affect our business, financial condition and results of operations. 70 Table of Contents Uncertainties exist with respect to the interpretation and implementation of the PRC Foreign Investment Law and its Implementation Regulations and how they may impact the viability of our current corporate structure, corporate governance and business operations.
If either VIE undergoes voluntary or involuntary liquidation proceeding, unrelated third-party creditors may claim rights to some or all of these assets, thereby hindering our ability to operate our business, which could materially and adversely affect our business, financial condition and results of operations. 71 Table of Contents Uncertainties exist with respect to the interpretation and implementation of the PRC Foreign Investment Law and its Implementation Regulations and how they may impact the viability of our current corporate structure, corporate governance and business operations.
If we fail to identify and fully appreciate the risks associated with the financial products we offer, or fail to disclose such risks to our clients, or if our clients suffer financial losses or other damages resulting from the financial products we offer, our reputation, client relationships, results of operations and financial conditions will be materially and adversely affected. ​ 35 Table of Contents If we fail to respond in a timely and cost-effective manner to the needs of our users and clients or if our new service offerings do not achieve sufficient market acceptance, our business and results of operations may be materially and adversely affected.
If we fail to identify and fully appreciate the risks associated with the financial products we offer, or fail to disclose such risks to our clients, or if our clients suffer financial losses or other damages resulting from the financial products we offer, our reputation, client relationships, results of operations and financial conditions will be materially and adversely affected. 36 Table of Contents If we fail to respond in a timely and cost-effective manner to the needs of our users and clients or if our new service offerings do not achieve sufficient market acceptance, our business and results of operations may be materially and adversely affected.
If our employees fail to pay or we fail to withhold their income taxes according to relevant laws and regulations, we may face sanctions imposed by the tax authorities or other PRC governmental authorities. 59 Table of Contents PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds of our securities offerings to make loans or additional capital contributions to our PRC subsidiaries and the Consolidated Affiliated Entities.
If our employees fail to pay or we fail to withhold their income taxes according to relevant laws and regulations, we may face sanctions imposed by the tax authorities or other PRC governmental authorities. 60 Table of Contents PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds of our securities offerings to make loans or additional capital contributions to our PRC subsidiaries and the Consolidated Affiliated Entities.
Furthermore, despite our efforts to address negative publicity and correct misinformation about our business model and practices, our reputation and brand may continue to be harmed by such negative publicity and misinformation, and the ADSs may experience substantial price volatility as a result. 42 Table of Contents In addition, any perception that the quality of our online brokerage and other financial services may not be the same as or better than that of other online brokerage and financial service firms can also damage our reputation.
Furthermore, despite our efforts to address negative publicity and correct misinformation about our business model and practices, our reputation and brand may continue to be harmed by such negative publicity and misinformation, and the ADSs may experience substantial price volatility as a result. 43 Table of Contents In addition, any perception that the quality of our online brokerage and other financial services may not be the same as or better than that of other online brokerage and financial service firms can also damage our reputation.
As we continue to expand our business in the United States, we will be subject to the rules and regulations imposed by the SEC, FINRA and other regulatory authorities. 51 Table of Contents In addition, U.S. domestic and foreign stock exchanges, other self-regulatory organizations and state and foreign securities commissions can censure, fine, issue cease-and-desist orders, or suspend or expel a broker-dealer or any of its officers or employees.
As we continue to expand our business in the United States, we will be subject to the rules and regulations imposed by the SEC, FINRA and other regulatory authorities. 52 Table of Contents In addition, U.S. domestic and foreign stock exchanges, other self-regulatory organizations and state and foreign securities commissions can censure, fine, issue cease-and-desist orders, or suspend or expel a broker-dealer or any of its officers or employees.
Errors in performing clearing functions, including clerical and other errors related to the handling of funds and securities held by us on behalf of clients, could lead to regulatory fines and civil penalties as well as losses and liability in related legal proceedings brought by clients and others. 45 Table of Contents Our success depends on the continuing service of our key employees, including our senior management members and other talent, who are highly sought after in the market.
Errors in performing clearing functions, including clerical and other errors related to the handling of funds and securities held by us on behalf of clients, could lead to regulatory fines and civil penalties as well as losses and liability in related legal proceedings brought by clients and others. 46 Table of Contents Our success depends on the continuing service of our key employees, including our senior management members and other talent, who are highly sought after in the market.
Failure to maintain our culture could have a material adverse effect on our business. 22 Table of Contents We are subject to extensive and evolving regulatory requirements in the markets we operate in, non-compliance with which may result in penalties, limitations and prohibitions on our future business activities or suspension or revocation of our licenses and trading rights, and consequently may materially and adversely affect our business, financial condition, operations and prospects.
Failure to maintain our culture could have a material adverse effect on our business. 23 Table of Contents We are subject to extensive and evolving regulatory requirements in the markets we operate in, non-compliance with which may result in penalties, limitations and prohibitions on our future business activities or suspension or revocation of our licenses and trading rights, and consequently may materially and adversely affect our business, financial condition, operations and prospects.
If our technology becomes more widely available to our current or future competitors for any reason, our operating results may be adversely affected. ​ 36 Table of Contents Additionally, to keep pace with changing technologies and client demands, we must correctly interpret and address market trends and enhance the features and functionality of our technology in response to these trends, which may lead to significant research and development costs.
If our technology becomes more widely available to our current or future competitors for any reason, our operating results may be adversely affected. 37 Table of Contents Additionally, to keep pace with changing technologies and client demands, we must correctly interpret and address market trends and enhance the features and functionality of our technology in response to these trends, which may lead to significant research and development costs.
Further, major international brokerage companies that have large retail online brokerage businesses as well as online brokerage units of commercial banks may also take advantage of their established resources and satisfy applicable regulatory requirements through acquisitions and organic development. ​ 26 Table of Contents We expect competition to increase in the future as current competitors diversify and improve their offerings and as new participants enter the market.
Further, major international brokerage companies that have large retail online brokerage businesses as well as online brokerage units of commercial banks may also take advantage of their established resources and satisfy applicable regulatory requirements through acquisitions and organic development. 27 Table of Contents We expect competition to increase in the future as current competitors diversify and improve their offerings and as new participants enter the market.
If our mobile apps are found to violate the provisions, we may be subject to penalties, including warning, service suspension or removal of our mobile apps from the relevant mobile app store, which may materially and adversely affect our business and operating results. 47 Table of Contents We may be subject to litigation and regulatory investigations and proceedings, and may not always be successful in defending ourselves against such claims or proceedings, which may affect our business operations and financial conditions.
If our mobile apps are found to violate the provisions, we may be subject to penalties, including warning, service suspension or removal of our mobile apps from the relevant mobile app store, which may materially and adversely affect our business and operating results. 48 Table of Contents We may be subject to litigation and regulatory investigations and proceedings, and may not always be successful in defending ourselves against such claims or proceedings, which may affect our business operations and financial conditions.
Any outcome of such nature may affect our ability to conduct business, harm our reputation and consequently, materially and adversely affect our business, financial condition, results of operations and prospects. 23 Table of Contents From time to time, Futu Securities, as a HK SFC-licensed corporation may be subject to or required to assist in inquiries or investigations by relevant regulatory authorities in Hong Kong, principally the HK SFC.
Any outcome of such nature may affect our ability to conduct business, harm our reputation and consequently, materially and adversely affect our business, financial condition, results of operations and prospects. 24 Table of Contents From time to time, Futu Securities, as a HK SFC-licensed corporation may be subject to or required to assist in inquiries or investigations by relevant regulatory authorities in Hong Kong, principally the HK SFC.
For this reason, we do not expect to be identified as a Commission-Identified Issuer under the HFCAA after we file this annual report on Form 20-F for the fiscal year ended December 31, 2023. Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in Mainland China and Hong Kong, among other jurisdictions.
For this reason, we do not expect to be identified as a Commission-Identified Issuer under the HFCAA after we file this annual report on Form 20-F for the fiscal year ended December 31, 2024. Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in Mainland China and Hong Kong, among other jurisdictions.
Failure to provide our users and clients with high quality services and experience for any reason could substantially harm our reputation and adversely impact our efforts to develop a trusted brand, which could have a material adverse effect on our business, results of operations, financial condition and prospects. ​ 43 Table of Contents Fraudulent or illegal activities on our platform could negatively impact our brand and reputation and cause the loss of users and clients.
Failure to provide our users and clients with high quality services and experience for any reason could substantially harm our reputation and adversely impact our efforts to develop a trusted brand, which could have a material adverse effect on our business, results of operations, financial condition and prospects. 44 Table of Contents Fraudulent or illegal activities on our platform could negatively impact our brand and reputation and cause the loss of users and clients.
In addition, the PRC government may impose specific requirement on financial information services, which may also affect our business and operations. 40 Table of Contents In August 2019, we officially launched our online wealth management product distribution service which gives our clients access to money market, fixed income and equity funds products from leading fund houses.
In addition, the PRC government may impose specific requirement on financial information services, which may also affect our business and operations. 41 Table of Contents In August 2019, we officially launched our online wealth management product distribution service which gives our clients access to money market, fixed income and equity funds products from leading fund houses.
Any errors, bugs or defects discovered in the software on which we rely could result in harm to our reputation, loss of users or financial service providers or liability for damages, any of which could adversely affect our business, results of operations and financial conditions. 44 Table of Contents A significant decrease in our liquidity could negatively affect our business and financial management as well as reduce client confidence in our company.
Any errors, bugs or defects discovered in the software on which we rely could result in harm to our reputation, loss of users or financial service providers or liability for damages, any of which could adversely affect our business, results of operations and financial conditions. 45 Table of Contents A significant decrease in our liquidity could negatively affect our business and financial management as well as reduce client confidence in our company.
Holders of such intellectual property rights may seek to enforce such intellectual property rights against us in China, Hong Kong, Singapore, the United States, Australia or other jurisdictions.
Holders of such intellectual property rights may seek to enforce such intellectual property rights against us in China, Hong Kong, Singapore, the United States, Australia and/ or other jurisdictions.
See also “—The ADSs may be delisted and prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China, which will materially and adversely affect the value of your investment.” If we fail to protect our platform or the information of our users and clients, whether due to cyber-attacks, computer viruses, physical or electronic break-in, breaches by third parties or other reasons, we may be subject to liabilities imposed by relevant laws and regulations, and our reputation and business may be materially and adversely affected.
See also “—The ADSs may be delisted and prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China, which will materially and adversely affect the value of your investment.” 29 Table of Contents If we fail to protect our platform or the information of our users and clients, whether due to cyber-attacks, computer viruses, physical or electronic break-in, breaches by third parties or other reasons, we may be subject to liabilities imposed by relevant laws and regulations, and our reputation and business may be materially and adversely affected.
In addition, some clients who have suffered substantial losses through our platform may blame our platform, seek to recover their damages from us or bring lawsuits against us. 27 Table of Contents Because our revenues and profitability depend largely on the receipt of transaction-based compensation, they are prone to significant fluctuations and are difficult to predict.
In addition, some clients who have suffered substantial losses through our platform may blame our platform, seek to recover their damages from us or bring lawsuits against us. 28 Table of Contents Because our revenues and profitability depend largely on the receipt of transaction-based compensation, they are prone to significant fluctuations and are difficult to predict.
Furthermore, we have incurred and anticipate that we will continue to incur considerable costs, management time and other resources in an effort to comply with Section 404 of the Sarbanes-Oxley Act and other requirements. 49 Table of Contents Increasing focus with respect to environmental, social and governance matters may impose additional costs on us or expose us to additional risks.
Furthermore, we have incurred and anticipate that we will continue to incur considerable costs, management time and other resources in an effort to comply with Section 404 of the Sarbanes-Oxley Act and other requirements. 50 Table of Contents Increasing focus with respect to environmental, social and governance matters may impose additional costs on us or expose us to additional risks.
Applicable laws, regulations, guidelines, circulars and other regulatory guidance with regard to online client onboarding procedures remain evolving and are subject to further changes. For the online application procedures followed by certain clients outside Hong Kong to open Hong Kong or U.S. trading accounts with us, see “Item 4. Information on the Company—B.
Applicable laws, regulations, guidelines, circulars and other regulatory guidance with regard to online client onboarding procedures remain evolving and are subject to further changes. For the online application procedures followed by certain clients outside Hong Kong to open Hong Kong or U.S. brokerage accounts with us, see “Item 4. Information on the Company—B.
In addition, as we have ceased to be an “emerging growth company” as such term is defined in the JOBS Act, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting. Our management has concluded that our internal control over financial reporting was effective as of December 31, 2023.
In addition, as we have ceased to be an “emerging growth company” as such term is defined in the JOBS Act, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting. Our management has concluded that our internal control over financial reporting was effective as of December 31, 2024.
The discontinuation of such financial subsidies or imposition of any additional taxes could adversely affect our financial condition and results of operations. 63 Table of Contents We may not be able to obtain certain benefits under relevant tax treaty on dividends paid by our PRC subsidiaries to us through our Hong Kong subsidiary.
The discontinuation of such financial subsidies or imposition of any additional taxes could adversely affect our financial condition and results of operations. 64 Table of Contents We may not be able to obtain certain benefits under relevant tax treaty on dividends paid by our PRC subsidiaries to us through our Hong Kong subsidiary.
Business Overview—Regulation—Overview of the Laws and Regulations Relating to Our Business and Operations in Hong Kong—Hong Kong Taxation.” As of December 31, 2023, the total retained earnings of our subsidiaries and the Consolidated Affiliated Entities located in China accounted for a relatively small portion of our total retained earnings and we currently do not have any plan to make offshore distribution.
Business Overview—Regulation—Overview of the Laws and Regulations Relating to Our Business and Operations in Hong Kong—Hong Kong Taxation.” As of December 31, 2024, the total retained earnings of our subsidiaries and the Consolidated Affiliated Entities located in China accounted for a relatively small portion of our total retained earnings and we currently do not have any plan to make offshore distribution.
Also, such a prohibition would significantly affect our ability to raise capital on terms acceptable to us, or at all, which would have a material adverse impact on our business, financial condition, and prospects. 65 Table of Contents It may be difficult for overseas authorities to conduct investigations or collect evidence within China.
Also, such a prohibition would significantly affect our ability to raise capital on terms acceptable to us, or at all, which would have a material adverse impact on our business, financial condition, and prospects. 66 Table of Contents It may be difficult for overseas authorities to conduct investigations or collect evidence within China.
No condition, stipulation or provision of the deposit agreement or ADSs serves as a waiver by any holder or beneficial owner of ADSs or by us or the depositary of compliance with any substantive provision of the U.S. federal securities laws and the rules and regulations promulgated thereunder. 76 Table of Contents You may be subject to limitations on transfer of your ADSs.
No condition, stipulation or provision of the deposit agreement or ADSs serves as a waiver by any holder or beneficial owner of ADSs or by us or the depositary of compliance with any substantive provision of the U.S. federal securities laws and the rules and regulations promulgated thereunder. 77 Table of Contents You may be subject to limitations on transfer of your ADSs.
Moomoo Financial Inc. and Futu Clearing Inc., as SEC-registered broker-dealers, have been subject to examinations and enquiries initiated by the SEC and FINRA from time to time. They may also be subject to similar examinations, investigations, enquiries, administrative proceedings or other regulatory actions by such and other regulatory authorities, including individual states where we conduct business, in the future.
Moomoo Financial Inc. and Futu Clearing Inc., as SEC-registered broker-dealers, have been subject to examinations and enquiries initiated by the SEC and FINRA from time to time. They may also be subject to similar examinations, investigations, enquiries, administrative proceedings or other regulatory actions by such and other regulatory authorities, including individual states where we conduct business.
See “—We are subject to extensive and evolving regulatory requirements in the markets we operate in, non-compliance with which may result in penalties, limitations and prohibitions on our future business activities or suspension or revocation of our licenses and trading rights, and consequently may materially and adversely affect our business, financial condition, operations and prospects.
See “—We are subject to extensive and evolving regulatory requirements in the markets we operate in, non-compliance with which may result in penalties, limitations and prohibitions on our future business activities or suspension or revocation of our licenses and trading rights, and consequently may materially and adversely affect our business, financial condition, operations and prospects.” and “Item 4.
Misconduct by our employees, or even unsubstantiated allegations of misconduct, could result in a material adverse effect on our reputation and our business. 41 Table of Contents Any future change in the regulatory and legal regime for the securities brokerage and wealth management industries in regions where we operate may have a significant impact on our business model.
Misconduct by our employees, or even unsubstantiated allegations of misconduct, could result in a material adverse effect on our reputation and our business. 42 Table of Contents Any future change in the regulatory and legal regime for the securities brokerage and wealth management industries in regions where we operate may have a significant impact on our business model.
See “—The Contractual Arrangements may result in adverse tax consequences to us in the PRC.” 69 Table of Contents Any limitation on the ability of our PRC subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.
See “—The Contractual Arrangements may result in adverse tax consequences to us in the PRC.” 70 Table of Contents Any limitation on the ability of our PRC subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.
As a consequence, we cannot be certain that the equity interest will be disposed pursuant to the contractual arrangement or ownership by the record holder of the equity interest. 66 Table of Contents All of the Contractual Arrangements are governed by and interpreted in accordance with PRC law, and disputes arising from the Contractual Arrangements will be resolved through arbitration in China.
As a consequence, we cannot be certain that the equity interest will be disposed pursuant to the contractual arrangement or ownership by the record holder of the equity interest. 67 Table of Contents All of the Contractual Arrangements are governed by and interpreted in accordance with PRC law, and disputes arising from the Contractual Arrangements will be resolved through arbitration in China.
In addition, these individuals may breach or cause the VIEs to breach or refuse to renew the existing Contractual Arrangements with us. 68 Table of Contents Currently, we do not have arrangements to address potential conflicts of interest the shareholders of the VIEs may encounter, on the one hand, and as a beneficial owner of our company, on the other hand.
In addition, these individuals may breach or cause the VIEs to breach or refuse to renew the existing Contractual Arrangements with us. 69 Table of Contents Currently, we do not have arrangements to address potential conflicts of interest the shareholders of the VIEs may encounter, on the one hand, and as a beneficial owner of our company, on the other hand.
As a result, fluctuations in exchange rates may have a material adverse effect on your investment. 50 Table of Contents Our anticipated international expansion will subject us to additional risks and increased legal and regulatory requirements, which could have a material effect on our business. Our historical operations have been focused on Hong Kong.
As a result, fluctuations in exchange rates may have a material adverse effect on your investment. 51 Table of Contents Our anticipated international expansion will subject us to additional risks and increased legal and regulatory requirements, which could have a material effect on our business. Our historical operations have been focused on Hong Kong.
During the years ended December 31, 2021, 2022 and 2023, the revenue generated from relevant internet audio-video program services was less than 0.01% of our total revenue per year and the absence of such license did not have any material adverse impact on our business and operations.
During the years ended December 31, 2022, 2023 and 2024, the revenue generated from relevant internet audio-video program services was less than 0.01% of our total revenue per year and the absence of such license did not have any material adverse impact on our business and operations.
This may restrict our ability to implement our acquisition strategy and could adversely affect our business and prospects. ​ 58 Table of Contents Any failure to comply with PRC regulations regarding our employee share incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions.
This may restrict our ability to implement our acquisition strategy and could adversely affect our business and prospects. 59 Table of Contents Any failure to comply with PRC regulations regarding our employee share incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions.
It is therefore difficult to effectively assess our future prospects. 21 Table of Contents We may not be able to manage our expansion effectively. Continuous expansion may increase the complexity of our business and place a strain on our management, operations, technical systems, financial resources and internal control functions.
It is therefore difficult to effectively assess our future prospects. 22 Table of Contents We may not be able to manage our expansion effectively. Continuous expansion may increase the complexity of our business and place a strain on our management, operations, technical systems, financial resources and internal control functions.
If we fail to maintain the required level of liquid capital, the relevant regulators may take actions against us and our business will be adversely affected. 53 Table of Contents Internet-related issues may reduce or slow the growth in the use of our services in the future.
If we fail to maintain the required level of liquid capital, the relevant regulators may take actions against us and our business will be adversely affected. 54 Table of Contents Internet-related issues may reduce or slow the growth in the use of our services in the future.
Unlike the common law system, prior court decisions may be cited for reference but have limited precedential value. ​ 55 Table of Contents In 1979, the PRC government began to promulgate a comprehensive system of laws, rules and regulations governing economic matters in general.
Unlike the common law system, prior court decisions may be cited for reference but have limited precedential value. 56 Table of Contents In 1979, the PRC government began to promulgate a comprehensive system of laws, rules and regulations governing economic matters in general.
Upon any sale, transfer, assignment or disposition of any Class B ordinary shares by a holder thereof to any non-affiliate of such holder, each of such Class B ordinary shares will be automatically and immediately converted into one Class A ordinary share. 72 Table of Contents As of the Latest Practicable Date, Mr.
Upon any sale, transfer, assignment or disposition of any Class B ordinary shares by a holder thereof to any non-affiliate of such holder, each of such Class B ordinary shares will be automatically and immediately converted into one Class A ordinary share. 73 Table of Contents As of the Latest Practicable Date, Mr.
This could also have a material adverse effect on our business, financial condition, results of operations and cash flows. ​ 38 Table of Contents We rely on a number of external service providers for certain key market information and data, technology, processing and supporting functions.
This could also have a material adverse effect on our business, financial condition, results of operations and cash flows. 39 Table of Contents We rely on a number of external service providers for certain key market information and data, technology, processing and supporting functions.
Quantitative and Qualitative Disclosures about Market Risk—Interest rate risk” of this annual report. 33 Table of Contents We may suffer significant losses from credit exposures arising from our margin financing, securities lending, IPO loans, and stock-pledged loan businesses.
Quantitative and Qualitative Disclosures about Market Risk—Interest rate risk” of this annual report. 34 Table of Contents We may suffer significant losses from credit exposures arising from our margin financing, securities lending, IPO loans, and stock-pledged loan businesses.
Business Overview—Regulation—Overview of the Laws and Regulations Relating to Our Business and Operations in China—Regulations on Cybersecurity and Privacy.” Since all the aforementioned laws and regulations are relatively new, there are uncertainties as to their interpretation and application, especially in relation to their applicability and requirements for our offshore subsidiaries when they engage in personal information processing activities for natural persons within Mainland China, including the information collection activities conducted by our offshore subsidiaries outside Mainland China.
Business Overview—Regulation—Overview of the Laws and Regulations Relating to Our Business and Operations in China—Regulations on Cybersecurity and Privacy.” 30 Table of Contents Since all the aforementioned laws and regulations are relatively new, there are uncertainties as to their interpretation and application, especially in relation to their applicability and requirements for our offshore subsidiaries when they engage in personal information processing activities for natural persons within Mainland China, including the information collection activities conducted by our offshore subsidiaries outside Mainland China.
Because of the uncertainties involved in establishing our PFIC status, our U.S. tax counsel expresses no opinion regarding our PFIC status. 79 Table of Contents If we are a PFIC in any taxable year, a U.S. Holder (as defined in “Item 10. Additional Information—E.
Because of the uncertainties involved in establishing our PFIC status, our U.S. tax counsel expresses no opinion regarding our PFIC status. 80 Table of Contents If we are a PFIC in any taxable year, a U.S. Holder (as defined in “Item 10. Additional Information—E.
If the CSRC is not satisfied with our rectification measures or imposes other further regulatory actions or penalties on us, our business and results of operations may be materially and adversely affected. ● Our operations and services involve collection, processing, and storage of significant amounts of data concerning our clients, business partners and employees and may be subject to complex and evolving laws and regulations regarding privacy and data protection and cybersecurity.
If the CSRC is not satisfied with our rectification measures or imposes other further regulatory actions or penalties on us, our business and results of operations may be materially and adversely affected. 20 Table of Contents ● Our operations and services involve collection, processing, and storage of significant amounts of data concerning our clients, business partners and employees and may be subject to complex and evolving laws and regulations regarding privacy and data protection and cybersecurity.
In these cases, the depositary may decide not to distribute such property to you. 75 Table of Contents We and the depository are entitled to amend the deposit agreement and to change the rights of ADS holders under the terms of such agreement, and we may terminate the deposit agreement, without the prior consent of the ADS holders.
In these cases, the depositary may decide not to distribute such property to you. 76 Table of Contents We and the depository are entitled to amend the deposit agreement and to change the rights of ADS holders under the terms of such agreement, and we may terminate the deposit agreement, without the prior consent of the ADS holders.
Based on our analysis of our activities as well as the composition of our income and valuation of our assets, including goodwill, we believe that we were a PFIC for our taxable year ended December 31, 2023. We may also be a PFIC in future taxable years.
Based on our analysis of our activities as well as the composition of our income and valuation of our assets, including goodwill, we believe that we were a PFIC for our taxable year ended December 31, 2024. We may also be a PFIC in future taxable years.
A reduction in our liquidity position could reduce our users’ and clients’ confidence, which could result in the loss of client trading accounts, or could cause us to fail to satisfy our liquidity requirements. In addition, if we fail to meet the liquidity requirements, regulators could limit our operations.
A reduction in our liquidity position could reduce our users’ and clients’ confidence, which could result in the loss of client brokerage accounts, or could cause us to fail to satisfy our liquidity requirements. In addition, if we fail to meet the liquidity requirements, regulators could limit our operations.
The experience and capabilities of China courts in handling intellectual property litigation varies and outcomes are unpredictable. 46 Table of Contents We may be subject to intellectual property infringement claims, which may be expensive to defend and disruptive to our business and operations.
The experience and capabilities of China courts in handling intellectual property litigation varies and outcomes are unpredictable. 47 Table of Contents We may be subject to intellectual property infringement claims, which may be expensive to defend and disruptive to our business and operations.
Such a situation could be costly and time-consuming and could distract our management from growing our business. Even if such allegations are ultimately proven to be groundless, allegations against us could severely impact our operations and shareholders’ equity, and the value of any investment in the ADSs could be greatly reduced or rendered worthless. ​ ​ 81 Table of Contents
Such a situation could be costly and time-consuming and could distract our management from growing our business. Even if such allegations are ultimately proven to be groundless, allegations against us could severely impact our operations and shareholders’ equity, and the value of any investment in the ADSs could be greatly reduced or rendered worthless. ​ ​
Shareholders of Cayman Islands exempted companies like us have no general rights under Cayman Islands law either (i) to inspect corporate records, other than the memorandum and articles of association and any special resolutions passed by such companies, and the registers of mortgages and charges of such companies, or (ii) to obtain copies of lists of shareholders of these companies.
Shareholders of Cayman Islands exempted companies like us have no general rights under Cayman Islands law either (i) to inspect corporate records, other than the memorandum and articles of association and any special resolutions passed by such companies, and the registers of mortgages and charges of such companies, or (ii) to obtain copies of register of members of these companies.
Moomoo Financial Singapore Pte. Ltd., or Moomoo Financial Singapore, as a Capital Markets Services Licensee in Singapore, may be subject to similar examinations and regulatory actions initiated by the MAS or other relevant regulatory authorities in Singapore.
Moomoo Financial Singapore, as a Capital Markets Services Licensee in Singapore, may be subject to similar examinations and regulatory actions initiated by the MAS or other relevant regulatory authorities in Singapore.
Specifically, the Special Administrative Measures for Entry of Foreign Investment (Negative List) (2021 Version), or the Negative List, which came into effect on January 1, 2022 and replace the previous version provides that foreign investors are generally not allowed to own more than 50% of the equity interests in a value-added telecommunication service provider other than an e-commerce service, domestic multi-party communications service, store-and-forward service, and call center service provider which does not apply to us.
Specifically, the Special Administrative Measures for Entry of Foreign Investment (Negative List) (2024 Version), or the Negative List, which came into effect on November 1, 2024 and replace the previous version provides that foreign investors are generally not allowed to own more than 50% of the equity interests in a value-added telecommunication service provider other than an e-commerce service, domestic multi-party communications service, store-and-forward service, and call center service provider which does not apply to us.
Risks Related to the ADSs ● The trading price of the ADSs has been and may continue to be volatile, which could result in substantial losses to you. ● Our dual-class voting structure will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares and the ADSs may view as beneficial, and may adversely affect the trading market for the ADSs. ● If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market price for the ADSs and trading volume could decline. ● Because we do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of the ADSs for return on your investment. ● The voting rights of holders of ADSs are limited by the terms of the deposit agreement, and you may not be able to exercise your right to direct how the Class A ordinary shares that are represented by your ADSs are voted.
Risks Related to the ADSs ● The trading price of the ADSs has been and may continue to be volatile, which could result in substantial losses to you. ● Our dual-class voting structure will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares and the ADSs may view as beneficial, and may adversely affect the trading market for the ADSs. ● If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market price for the ADSs and trading volume could decline. ● There can be no assurance that we will pay dividends and you must rely on price appreciation of the ADSs for return on your investment. ● The voting rights of holders of ADSs are limited by the terms of the deposit agreement, and you may not be able to exercise your right to direct how the Class A ordinary shares that are represented by your ADSs are voted.
See “—The trading price of the ADSs has been and may continue to be volatile, which could result in substantial losses to you.” ​ 80 Table of Contents Techniques employed by short sellers may drive down the market price of the ADSs.
See “—The trading price of the ADSs has been and may continue to be volatile, which could result in substantial losses to you.” Techniques employed by short sellers may drive down the market price of the ADSs.
In 2021, 2022 and 2023, we generated 0.3%, 0.3% and 0.2% of our total revenues through the Consolidated Affiliated Entities in China, respectively, whose assets accounted for 0.1%, 0.1% and 0.1% of our total assets during the same years, respectively. For a description of the Contractual Arrangements, see “Item 4. Information on the Company—C.
In 2022, 2023 and 2024, we generated 0.3%, 0.2% and 0.1% of our total revenues through the Consolidated Affiliated Entities in China, respectively, whose assets accounted for 0.1%, 0.1% and less than 0.1% of our total assets during the same years, respectively. For a description of the Contractual Arrangements, see “Item 4. Information on the Company—C.
Moomoo Financial Canada, a dealer member of CIRO and CIPF, is also subject to extensive regulations in Canada. Futu Malaysia Sdn.Bhd., which holds a Capital Markets Services License, is regulated by the Securities Commission Malaysia.
Moomoo Financial Canada, a dealer member of CIRO and CIPF, is also subject to extensive regulations in Canada. Moomoo Securities Malaysia, which holds a Capital Markets Services License, is regulated by the Securities Commission Malaysia.
There remains a risk that at the conclusion of the inquiries and the investigation, the HK SFC may identify misconduct, deficiency or material non-compliance, undertake investigation and take regulatory actions, which may include, among other things, reprimands, fines, limitations or prohibitions on our future business activities or suspension or revocation of Futu Securities’ licenses and trading rights.
There remains a risk that at the conclusion of any such inquiries and investigations, the HK SFC may identify misconduct, deficiency or material non-compliance, and take regulatory actions, which may include, among other things, reprimands, fines, limitations or prohibitions on our future business activities or suspension or revocation of Futu Securities’ licenses and trading rights.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeWe also cooperate with CCASS to provide clearing and execution services for our brokerage business involving securities listed on the Hong Kong Stock Exchange and stocks qualified under Stock Connect listed on the Shanghai Stock Exchange or the Shenzhen Stock Exchange. ● Singapore: We carry out our operations in Singapore through our Singapore-incorporated subsidiary Moomoo Financial Singapore, a licensed corporation registered with the Monetary Authority of Singapore with the Capital Markets Services License. ● The U.S.: We carry out our operations in the U.S. through our U.S.-incorporated subsidiaries, including Moomoo Financial Inc., a licensed broker-dealer in the U.S., and Futu Clearing Inc., a licensed provider of clearing and settlement services for securities transactions in the U.S. financial markets through the Depositary Trust Clearing Corporation and its subsidiaries. ● Australia: We carry out our operations in Australia through our Australia-incorporated subsidiary, Futu Australia, which holds an Australian Financial Services License granted and regulated by the Australian Securities and Investments Commission. ● Japan: We carry out our operations in Japan through our Japan-incorporated subsidiary Moomoo Securities Japan, a licensed corporation registered with the Financial Services Agency. ● Canada: We carry out our operations in Canada through our Canada-incorporated subsidiary Moomoo Financial Canada, a dealer member of CIRO and CIPF. ● Malaysia: We carry out our operations in Malaysia through our Malaysia-incorporated subsidiary Futu Malaysia Sdn.Bhd, a licensed corporation regulated by Securities Commission Malaysia.
Biggest changeIn 2024, Futu Securities uplifted its Type 1 License with HK SFC to provide virtual asset dealing services. ● Singapore: We carry out our operations in Singapore through our Singapore-incorporated subsidiary Moomoo Financial Singapore, a licensed corporation registered with the Monetary Authority of Singapore with the Capital Markets Services License. ● The U.S.: We carry out our operations in the U.S. through our U.S.-incorporated subsidiaries, including Moomoo Financial Inc., a licensed broker-dealer in the U.S., and Futu Clearing Inc., a licensed provider of clearing and settlement services for securities transactions in the U.S. financial markets through the Depositary Trust Clearing Corporation and its subsidiaries. ● Australia: We carry out our operations in Australia through our Australia-incorporated subsidiary, Moomoo Securities Australia, which holds an Australian Financial Services License granted and regulated by the Australian Securities and Investments Commission. ● Japan: We carry out our operations in Japan through our Japan-incorporated subsidiary Moomoo Securities Japan, a licensed corporation registered with the Financial Services Agency. ● Canada: We carry out our operations in Canada through our Canada-incorporated subsidiary Moomoo Financial Canada, a dealer member of CIRO and CIPF. ● Malaysia: We carry out our operations in Malaysia through our Malaysia-incorporated subsidiary Moomoo Securities Malaysia, a licensed corporation regulated by Securities Commission Malaysia. 89 Table of Contents We provide comprehensive order types to meet our clients’ different trading strategies, including limit/market order, auction limit/market order, odd-lot order, stop loss limit/market order, touch limit/market order, trailing stop loss limit/market order and TWAP (time-weighted average price) /VWAP (volume-weighted average price) order.
If the CSRC pursues further regulatory actions or imposes penalties on us, including but not limited to fines, suspension of parts or all of our operations or activities in Mainland China, they may, individually or taken as a whole, have a material and adverse impact on our operations and financial results. See “Item 3. Key Information—D.
If the CSRC pursues further regulatory actions or imposes penalties on us, including but not limited to fines, suspension of parts or all of our operations or activities in Mainland China, they may, individually or taken as a whole, have a material and adverse impact on our operations and financial results. See “Item 3. Key Information—D.
Regulations on Value-added Tax The Provisional Regulations of on Value-added Tax of the PRC were promulgated by the State Council on December 13, 1993, which most recently amended on November 19, 2017.
Regulations on Value-added Tax The Provisional Regulations of the PRC on Value-added Tax were promulgated by the State Council on December 13, 1993, which most recently amended on November 19, 2017.
Based on the Provisional Regulations of on Value-added Tax of the PRC and the Implementation Rules for the Implementation of Provisional Regulations of on Value-added Tax of the PRC, the State Council promulgated the Order on Abolishing the Provisional Regulations of the PRC on Business Tax and Amending the Provisional Regulations of on Value-added Tax of the PRC, on November 19, 2017, pursuant to which all enterprises and individuals engaged in the sale of goods, the provision of processing, repair and replacement services, sales of services, intangible assets, real property and the importation of goods within the PRC are the taxpayers of Value-added Tax.
Based on the Provisional Regulations of on Value-added Tax of the PRC and the Implementation Rules for the Implementation of Provisional Regulations of on Value-added Tax of the PRC, the State Council promulgated the Order on Abolishing the Provisional Regulations of the PRC on Business Tax and Amending the Provisional Regulations of the PRC on Value-added Tax, on November 19, 2017, pursuant to which all enterprises and individuals engaged in the sale of goods, the provision of processing, repair and replacement services, sales of services, intangible assets, real property and the importation of goods within the PRC are the taxpayers of Value-added Tax.
A CMSL holder should, among other things: (a) take appropriate steps to identify, assess and update its money laundering and terrorism financing risks in relation to the launch or use of new products, new business practices, new delivery mechanisms, or new or developing technologies, and to ensure that appropriate measures and controls are implemented to mitigate and manage such risks; (b) conduct anti-money laundering and customer due diligence (“ CDD ”) checks on all new customers (extending to the beneficial owners, connected parties of the customer and persons appointed to act on the customer’s behalf), and update its CDD checks on existing customers from time to time; (c) perform such CDD checks where the licensed corporation first establishes business relations with any customer, where the licensed corporation undertakes any transaction of a value exceeding S$20,000 for any customer who has not otherwise established business relations with it, where there is a suspicion of money laundering or terrorism financing, or where the licensed corporation has doubts about the veracity or adequacy of any information previously obtained; (d) reserve the right to request for such information as deemed necessary to verify the identity, tax status and/or source of payment of a customer in order to comply with any applicable law or regulation of any jurisdiction; 157 Table of Contents (e) implement internal risk management systems, policies, procedures and controls to determine if particular business relations with or transactions for any customer presents a higher risk for money laundering or terrorism financing; (f) conduct on-going monitoring of activities of its customers to ensure that they are consistent with the nature of business, the risk profile and source of funds, as well as identify transactions that are complex, large or unusual, or patterns of transactions that have no apparent economic or lawful purpose; (g) conduct comprehensive on-going screening against the United Nations watch lists, other relevant money laundering and terrorism financing sources and lists and information provided by the MAS or other relevant authorities in Singapore; and (h) report transactions suspected to contain the proceeds of criminal conduct or that is connected in any way with money laundering, tax evasion or terrorist financing to the Suspicious Transactions Reporting Office and the MAS, and document the basis for its assessment and the decision to report the transaction.
A CMSL holder should, among other things: (a) take appropriate steps to identify, assess and update its money laundering and terrorism financing risks in relation to the launch or use of new products, new business practices, new delivery mechanisms, or new or developing technologies, and to ensure that appropriate measures and controls are implemented to mitigate and manage such risks; (b) conduct anti-money laundering and customer due diligence (“ CDD ”) checks on all new customers (extending to the beneficial owners, connected parties of the customer and persons appointed to act on the customer’s behalf), and update its CDD checks on existing customers from time to time; (c) perform such CDD checks where the licensed corporation first establishes business relations with any customer, where the licensed corporation undertakes any transaction of a value exceeding S$20,000 for any customer who has not otherwise established business relations with it, where there is a suspicion of money laundering or terrorism financing, or where the licensed corporation has doubts about the veracity or adequacy of any information previously obtained; (d) reserve the right to request for such information as deemed necessary to verify the identity, tax status and/or source of payment of a customer in order to comply with any applicable law or regulation of any jurisdiction; (e) implement internal risk management systems, policies, procedures and controls to determine if particular business relations with or transactions for any customer presents a higher risk for money laundering or terrorism financing; (f) conduct on-going monitoring of activities of its customers to ensure that they are consistent with the nature of business, the risk profile and source of funds, as well as identify transactions that are complex, large or unusual, or patterns of transactions that have no apparent economic or lawful purpose; (g) conduct comprehensive on-going screening against the United Nations watch lists, other relevant money laundering and terrorism financing sources and lists and information provided by the MAS or other relevant authorities in Singapore; and 156 Table of Contents (h) report transactions suspected to contain the proceeds of criminal conduct or that is connected in any way with money laundering, tax evasion or terrorist financing to the Suspicious Transactions Reporting Office and the MAS, and document the basis for its assessment and the decision to report the transaction.
Consent is not considered given unless the purpose of collection, use or disclosure is notified to the individual and his consent is obtained in relation to such notified purpose; (b) collect, use or disclose personal data about an individual only for purposes that a reasonable person would consider appropriate and, if applicable, have been notified to the individual concerned; (c) notify the individual of the purposes for which an individual’s personal data is intended to be collected, used or disclosed on or before such collection, use or disclosure; (d) give an individual reasonable access to his or her own personal data which the organization has in its possession or control (including informing the individual of the ways in which his personal data has been used or disclosed over the past year); (e) correct errors and omissions in the personal data of an individual if the individual so requests; 161 Table of Contents (f) make reasonable effort to ensure that personal data collected by it is accurate and complete; (g) take reasonable security measures to protect the personal data from unauthorised access, collection, use, disclosure, tampering or disposal, and the loss of any storage medium or device on which the personal data is stored; (h) not retain personal data or to remove the means by which personal data can be associated with particular individuals, as soon as it is reasonable to assume that the original purpose of the collection is no longer served by retention and that retention is also no longer needed for legal or business purposes; (i) ensure that when personal data is transferred out of Singapore to another country, a standard of protection comparable to that under Singapore law is given to the transferred personal data; (j) notify the PDPC of a data breach that results in or is likely to result in significant harm to an affected individual or that is or is likely to be of a significant scale; and (k) implement policies and procedures to comply with the PDPA and to make information about such policies and procedures publicly available.
Consent is not considered given unless the purpose of collection, use or disclosure is notified to the individual and his consent is obtained in relation to such notified purpose; (b) collect, use or disclose personal data about an individual only for purposes that a reasonable person would consider appropriate and, if applicable, have been notified to the individual concerned; (c) notify the individual of the purposes for which an individual’s personal data is intended to be collected, used or disclosed on or before such collection, use or disclosure; (d) give an individual reasonable access to his or her own personal data which the organization has in its possession or control (including informing the individual of the ways in which his personal data has been used or disclosed over the past year); (e) correct errors and omissions in the personal data of an individual if the individual so requests; (f) make reasonable effort to ensure that personal data collected by it is accurate and complete; (g) take reasonable security measures to protect the personal data from unauthorised access, collection, use, disclosure, tampering or disposal, and the loss of any storage medium or device on which the personal data is stored; (h) not retain personal data or to remove the means by which personal data can be associated with particular individuals, as soon as it is reasonable to assume that the original purpose of the collection is no longer served by retention and that retention is also no longer needed for legal or business purposes; (i) ensure that when personal data is transferred out of Singapore to another country, a standard of protection comparable to that under Singapore law is given to the transferred personal data; 160 Table of Contents (j) notify the PDPC of a data breach that results in or is likely to result in significant harm to an affected individual or that is or is likely to be of a significant scale; and (k) implement policies and procedures to comply with the PDPA and to make information about such policies and procedures publicly available.
Pursuant to the Ninth Amendment to the Criminal Law, issued by the SCNPC on August 29, 2015, which became effective on November 1, 2015, any internet service provider that fails to fulfill the obligations related to internet information security administration and refuses to rectify upon orders is subject to criminal penalty for causing (i) any dissemination of illegal information in large scale; (ii) any significant damages due to the leakage of the client’s information; (iii) any serious loss of criminal evidence; or (iv) other serious harm, and any individual or entity information may be subject to criminal penalty for (a) illegally selling or providing personal information to third parties, or (b) stealing or illegally obtaining any personal information. ​ 134 Table of Contents On July 6, 2021, the relevant PRC government authorities made public the Opinions on Strictly Combatting Illegal Securities Activities in Accordance with the Law, or the July 6 Opinion, which called for the enhanced cross-border regulatory cooperation and administration and supervision of overseas-listed China-based companies.
Pursuant to the Ninth Amendment to the Criminal Law, issued by the SCNPC on August 29, 2015, which became effective on November 1, 2015, any internet service provider that fails to fulfill the obligations related to internet information security administration and refuses to rectify upon orders is subject to criminal penalty for causing (i) any dissemination of illegal information in large scale; (ii) any significant damages due to the leakage of the client’s information; (iii) any serious loss of criminal evidence; or (iv) other serious harm, and any individual or entity information may be subject to criminal penalty for (a) illegally selling or providing personal information to third parties, or (b) stealing or illegally obtaining any personal information. 133 Table of Contents On July 6, 2021, the relevant PRC government authorities made public the Opinions on Strictly Combatting Illegal Securities Activities in Accordance with the Law, or the July 6 Opinion, which called for the enhanced cross-border regulatory cooperation and administration and supervision of overseas-listed China-based companies.
Any undistributed profit for the previous accounting years may be distributed together with the distributable profit for the current accounting year. 140 Table of Contents Regulations on Foreign Exchange Registration of Overseas Investment by PRC Residents Pursuant to the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37, which was issued and became effective on July 4, 2014, PRC residents, including PRC institutions and individuals, are required to register with local branches of SAFE in connection with their direct establishment or indirect control of an offshore entity, for the purpose of overseas investment and financing, with such PRC residents’ legally owned assets or equity interest in domestic enterprises or offshore assets or interests, referred to in SAFE Circular 37 as a “special purpose vehicle.” SAFE Circular 37 further requires amendment to the registration in the event of any significant changes with respect to the special purpose vehicle, including but not limited to increase or decrease of capital contributed by PRC individuals, share transfer or exchange, merger, division or other material event.
Any undistributed profit for the previous accounting years may be distributed together with the distributable profit for the current accounting year. 139 Table of Contents Regulations on Foreign Exchange Registration of Overseas Investment by PRC Residents Pursuant to the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37, which was issued and became effective on July 4, 2014, PRC residents, including PRC institutions and individuals, are required to register with local branches of SAFE in connection with their direct establishment or indirect control of an offshore entity, for the purpose of overseas investment and financing, with such PRC residents’ legally owned assets or equity interest in domestic enterprises or offshore assets or interests, referred to in SAFE Circular 37 as a “special purpose vehicle.” SAFE Circular 37 further requires amendment to the registration in the event of any significant changes with respect to the special purpose vehicle, including but not limited to increase or decrease of capital contributed by PRC individuals, share transfer or exchange, merger, division or other material event.
The M&A Rules, among other things, require offshore special purpose vehicles, formed for overseas listing purposes through acquisitions of PRC domestic companies and controlled by PRC companies or individuals, must obtain approval from the CSRC prior to publicly listing such special purpose vehicle’s securities on an overseas stock exchange. 141 Table of Contents In addition, pursuant to the Circular of the General Office of State Council on Establishing the Security Review System for Merger and Acquisition of Domestic Enterprises by Foreign Investors issued by the General Office of the State Council on February 3, 2011 and took effect on March 3, 2011 and the Provisions of the Ministry of Commerce on the Implementation of the Safety Review System for Merger and Acquisition of Domestic Enterprises by Foreign Investors issued by the MOFCOM that became effective in September 2011, mergers and acquisitions by foreign investors that raise “national defense and security” concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise “national security” concerns are subject to strict review by the MOFCOM, and the rules prohibit any activities attempting to bypass a security review, including by structuring the transaction through a proxy or contractual control arrangement.
The M&A Rules, among other things, require offshore special purpose vehicles, formed for overseas listing purposes through acquisitions of PRC domestic companies and controlled by PRC companies or individuals, must obtain approval from the CSRC prior to publicly listing such special purpose vehicle’s securities on an overseas stock exchange. 140 Table of Contents In addition, pursuant to the Circular of the General Office of State Council on Establishing the Security Review System for Merger and Acquisition of Domestic Enterprises by Foreign Investors issued by the General Office of the State Council on February 3, 2011 and took effect on March 3, 2011 and the Provisions of the Ministry of Commerce on the Implementation of the Safety Review System for Merger and Acquisition of Domestic Enterprises by Foreign Investors issued by the MOFCOM that became effective in September 2011, mergers and acquisitions by foreign investors that raise “national defense and security” concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise “national security” concerns are subject to strict review by the MOFCOM, and the rules prohibit any activities attempting to bypass a security review, including by structuring the transaction through a proxy or contractual control arrangement.
Pursuant to the Circular of Further Improving and Adjusting Foreign Exchange Administration Policies on Foreign Direct Investment, or the SAFE Circular 59 promulgated by SAFE on November 19, 2012, which became effective on December 17, 2012 and last amended on December 30, 2019, the opening of various special purpose foreign exchange accounts, such as pre-establishment expenses accounts, foreign exchange capital accounts and guarantee accounts, the reinvestment of Renminbi proceeds by foreign investors in the PRC, and remittance of foreign exchange profits and dividends by a foreign invested enterprise to its foreign shareholders no longer require the approval or verification of SAFE, and multiple capital accounts for the same entity may be opened in different provinces, which was not possible previously. 139 Table of Contents On March 30, 2015, SAFE promulgated the Notice of the State Administration of Foreign Exchange on Reforming the Administration of Foreign Exchange Settlement of Capital of Foreign-invested Enterprises, or SAFE Circular 19, which became effective on June 1, 2015 and was last amended on March 23, 2023, in replacement of the Circular on the Relevant Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign—Invested Enterprises.
Pursuant to the Circular of Further Improving and Adjusting Foreign Exchange Administration Policies on Foreign Direct Investment, or the SAFE Circular 59 promulgated by SAFE on November 19, 2012, which became effective on December 17, 2012 and last amended on December 30, 2019, the opening of various special purpose foreign exchange accounts, such as pre-establishment expenses accounts, foreign exchange capital accounts and guarantee accounts, the reinvestment of Renminbi proceeds by foreign investors in the PRC, and remittance of foreign exchange profits and dividends by a foreign invested enterprise to its foreign shareholders no longer require the approval or verification of SAFE, and multiple capital accounts for the same entity may be opened in different provinces, which was not possible previously. 138 Table of Contents On March 30, 2015, SAFE promulgated the Notice of the State Administration of Foreign Exchange on Reforming the Administration of Foreign Exchange Settlement of Capital of Foreign-invested Enterprises, or SAFE Circular 19, which became effective on June 1, 2015 and was last amended on March 23, 2023, in replacement of the Circular on the Relevant Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign—Invested Enterprises.
A confiscation order under Section 64 of the CDSA is an order for the defendant to pay an amount of money assessed to correspond to the value of the benefit he or she derived from drug dealing or criminal conduct, a restraint order under Section 19 serves to prohibit any person from dealing with realizable property, and a charging order under Section 20 (applicable to immovable property and to capital markets products) serves to secure payment of any amount payable under a confiscation order.
A confiscation order under the CDSA is an order for the defendant to pay an amount of money assessed to correspond to the value of the benefit he or she derived from drug dealing or criminal conduct, a restraint order under Section 19 serves to prohibit any person from dealing with realizable property, and a charging order under Section 20 (applicable to immovable property and to capital markets products) serves to secure payment of any amount payable under a confiscation order.
Each of such agreements is binding on the parties thereto and none of them is void or may become invalid pursuant to the Civil Code of the PRC; (iii) none of the agreement under the Contractual Arrangements violates any provisions of the respective articles of association of the VIEs or the WFOE; (iv) no approvals or authorizations from the PRC governmental authorities are required for the execution and performance of the Contractual Arrangements, except that: a. the exercise of the option by the WFOE or its designee of its rights under the Exclusive Option Agreements to acquire all or part of the equity interests in the VIEs is subject to the approvals of, consent of, filing with and/or registrations with the PRC governmental authorities; b. the equity pledges contemplated under the Equity Pledge Agreements are subject to the registration with the relevant state or local administration bureau for market regulation; c. the arbitration awards/interim remedies provided under the dispute resolution provision of the Contractual Arrangements shall be recognized by the PRC courts before compulsory enforcement; and (v) each of the agreements under the Contractual Arrangements is valid, legal and binding under the PRC laws, except that the Contractual Arrangements provide that the arbitral body may award interim remedies over the shares and/or assets of the VIEs, injunctive relief (such as for the conduct of business or to compel the transfer of assets) and/or order the winding up of the VIEs, and that courts of Hong Kong, the Cayman Islands (being the place of incorporation of our company) and the PRC (being the place of incorporation of the VIEs) also have jurisdiction for the grant and/or enforcement of arbitral award and interim remedies against the shares and/or assets of the VIEs, while under PRC laws, an arbitral body has no power to grant injunctive relief and may not directly issue a provisional or final liquidation order for the purpose of protecting assets of or equity interests in the VIEs in case of disputes.
Each of such agreements is binding on the parties thereto and none of them is void or may become invalid pursuant to the Civil Code of the PRC; (iii) none of the agreement under the Contractual Arrangements violates any provisions of the respective articles of association of the VIEs or the WFOE; (iv) no approvals or authorizations from the PRC governmental authorities are required for the execution and performance of the Contractual Arrangements, except that: a. the exercise of the option by the WFOE or its designee of its rights under the Exclusive Option Agreements to acquire all or part of the equity interests in the VIEs is subject to the approvals of, consent of, filing with and/or registrations with the PRC governmental authorities; b. the equity pledges contemplated under the Equity Pledge Agreements are subject to the registration with the relevant state or local administration bureau for market regulation; c. the arbitration awards/interim remedies provided under the dispute resolution provision of the Contractual Arrangements shall be recognized by the PRC courts before compulsory enforcement; and 168 Table of Contents (v) each of the agreements under the Contractual Arrangements is valid, legal and binding under the PRC laws, except that the Contractual Arrangements provide that the arbitral body may award interim remedies over the shares and/or assets of the VIEs, injunctive relief (such as for the conduct of business or to compel the transfer of assets) and/or order the winding up of the VIEs, and that courts of Hong Kong, the Cayman Islands (being the place of incorporation of our company) and the PRC (being the place of incorporation of the VIEs) also have jurisdiction for the grant and/or enforcement of arbitral award and interim remedies against the shares and/or assets of the VIEs, while under PRC laws, an arbitral body has no power to grant injunctive relief and may not directly issue a provisional or final liquidation order for the purpose of protecting assets of or equity interests in the VIEs in case of disputes.
We have established an intelligent risk control platform built on our proprietary algorithms, which is capable of analyzing different types, sources and stages of risks and providing margin ratio adjustment recommendations and early risk warnings. We have also developed AI-based customer service function leveraging our big data analytic and natural language processing capabilities.
We have established an intelligent risk control platform built on our proprietary algorithms, which is capable of analyzing different types, sources and stages of risks and providing margin ratio adjustment recommendations and early risk warnings. We have also developed AI-based customer service function leveraging our big data analytic s and natural language processing capabilities.
Pursuant to The Several Provisions on Regulating the Market Order of Internet Information Services, internet information service providers are required to, among others, (i) expressly inform the users of the method, content and purpose of the collection and processing of such users’ personal information and may only collect such information necessary for the provision of its services; and (ii) properly maintain the users’ personal information, and in case of any leak or possible leak of a user’s personal information, internet information service providers must take immediate remedial measures and, in severe circumstances, make an immediate report to the telecommunications regulatory authority. ​ 135 Table of Contents In addition, on December 28, 2012, the Decision on Strengthening Network Information Protection promulgated by the SCNPC which requires internet service providers to establish and publish policies regarding the collection and use of electronic personal information and to take necessary measures to ensure the security of the information and to prevent leakage, damage or loss.
Pursuant to The Several Provisions on Regulating the Market Order of Internet Information Services, internet information service providers are required to, among others, (i) expressly inform the users of the method, content and purpose of the collection and processing of such users’ personal information and may only collect such information necessary for the provision of its services; and (ii) properly maintain the users’ personal information, and in case of any leak or possible leak of a user’s personal information, internet information service providers must take immediate remedial measures and, in severe circumstances, make an immediate report to the telecommunications regulatory authority. 134 Table of Contents In addition, on December 28, 2012, the Decision on Strengthening Network Information Protection promulgated by the SCNPC which requires internet service providers to establish and publish policies regarding the collection and use of electronic personal information and to take necessary measures to ensure the security of the information and to prevent leakage, damage or loss.
In addition, we perform our corporate due diligence procedures (including but not limited to, obtaining and verifying its identity and its ultimate beneficial owner, and conducting background check and client risk assessments) in accordance with the anti-money laundering guidelines issued and updated by the HK SFC and MAS from time to time.
In addition, we perform our due diligence procedures (including but not limited to, obtaining and verifying its identity and its ultimate beneficial owner, and conducting background check and client risk assessments) in accordance with the anti-money laundering guidelines issued and updated by the HK SFC and MAS from time to time.
A securities brokerage service provider at inception, we are now an all-rounded online financial services platform, seamlessly integrating services and products including trading, wealth management product distribution, market data and information, user community, investor education, and corporate services with a focus on the online securities brokerage market.
A securities brokerage service provider at inception, we are now an all-rounded online financial services platform, seamlessly integrating services and products including trading, wealth management product distribution, market data and information, user community, investor education, and institutional and corporate services with a focus on the online securities brokerage market.
The computation of net capital is intended to determine the broker-dealer’s liquidity and requires various adjustments to GAAP net worth. The amount of required net capital varies based upon the nature and scope of the broker-dealer’s business. Clearing brokers that carry customer accounts typically have substantially higher net capital requirements than introducing brokers.
The computation of net capital is intended to determine the broker-dealer’s liquidity and requires various adjustments to GAAP net worth. The amount of required net capital varies based upon the nature and scope of the broker-dealer’s business. Clearing brokers that carry customer accounts typically have substantially higher minimum net capital requirements than introducing brokers.
Our income generated from wealth management product distribution services is categorized as other income in our financial statements. ● Mutual Funds . We selectively work with established fund houses to distribute their fund products, including money market, fixed income, equity, balanced and commodity fund products.
Our income generated from wealth management product distribution services is mainly categorized as other income in our financial statements. ● Mutual Funds . We selectively work with established fund houses to distribute their fund products, including money market, fixed income, equity, balanced and commodity fund products.
We also provide our corporate clients with similar services, where we have dedicated customer service teams to attend to any issues our corporate clients may encounter, striving to respond as soon as possible. Our corporate clients can also reach out to us anytime and discuss any improvements and changes to the services that we provide.
We also provide our institutional/corporate clients with similar services, where we have dedicated customer service teams to attend to any issues our institutional/corporate clients may encounter, striving to respond as soon as possible. Our institutional/corporate clients can also reach out to us anytime and discuss any improvements and changes to the services that we provide.
The SAT Circular 7 may be determined by the tax authorities to be applicable to our offshore transactions or sale of our shares or those of our offshore subsidiaries where non-resident enterprises, being the transferors, were involved. 143 Table of Contents Regulations on Employment and Social Welfare Regulations on Employment in the PRC The principle regulations that govern employment and labor matters in PRC include: (i) Labor Law of the PRC, which was promulgated by the SCNPC on July 5, 1994, and last amended on December 29, 2018; (ii) the Labor Contract Law of the PRC which was promulgated by the SCNPC on June 29, 2007 and last amended on December 28, 2012, and (iii) the Implementing Regulations of the Labor Contract Law of the PRC which was promulgated by the State Council on September 18, 2008.
The SAT Circular 7 may be determined by the tax authorities to be applicable to our offshore transactions or sale of our shares or those of our offshore subsidiaries where non-resident enterprises, being the transferors, were involved. 142 Table of Contents Regulations on Employment and Social Welfare Regulations on Employment in the PRC The principle regulations that govern employment and labor matters in PRC include: (i) Labor Law of the PRC, which was promulgated by the SCNPC on July 5, 1994, and last amended on December 29, 2018; (ii) the Labor Contract Law of the PRC which was promulgated by the SCNPC on June 29, 2007 and last amended on December 28, 2012, and (iii) the Implementing Regulations of the Labor Contract Law of the PRC which was promulgated by the State Council on September 18, 2008.
For residents in Hong Kong, the prospective client can choose to complete such procedures either online or offline. o Online : A prospective client is required to (i) submit a copy of his or her Hong Kong photo identification, Hong Kong residential address proof and other relevant identification documents, (ii) link the trading account to be opened with his or her personal bank account opened with a qualified bank in Hong Kong or other eligible jurisdictions, and (iii) transfer a minimum of HK$10,000 or US$1,500 into the trading account from that personal bank account, or mail to us a cheque in such amount together with relevant identification documents.
For residents in Hong Kong, the prospective client can choose to complete such procedures either online or offline. o Online : A prospective client is required to (i) submit a copy of his or her Hong Kong photo identification, Hong Kong residential address proof and other relevant identification documents, (ii) link the brokerage account to be opened with his or her personal bank account opened with a qualified bank in Hong Kong or other eligible jurisdictions, and (iii) transfer a minimum of HK$10,000 or US$1,500 into the brokerage account from that personal bank account, or mail to us a cheque in such amount together with relevant identification documents.
Funds or securities are then transferred to or from our accounts upon settlement, which we then further remit back to the relevant trading accounts, after deducting the fees for our securities brokerage services, and are normally settled within two business days.
Funds or securities are then transferred to or from our accounts upon settlement, which we then further remit back to the relevant brokerage accounts, after deducting the fees for our securities brokerage services, and are normally settled within two business days.
Moomoo Financial Singapore shall satisfy itself of compliance with all relevant laws and requirements in the relevant foreign jurisdictions, before it starts offering products and services to investors residing in that foreign jurisdiction. ​ 154 Table of Contents Representatives, Directors, and CEO Requirements Under Section 99B(1) of the SFA, individuals who are employed by or who are acting for a CMSL holder in Singapore to carry out the regulated activities are required to be appointed, provisional or temporary representatives under the SFA, unless exempted.
Moomoo Financial Singapore shall satisfy itself of compliance with all relevant laws and requirements in the relevant foreign jurisdictions, before it starts offering products and services to investors residing in that foreign jurisdiction. 153 Table of Contents Representatives, Directors, and CEO Requirements Under Section 99B(1) of the SFA, individuals who are employed by or who are acting for a CMSL holder in Singapore to carry out the regulated activities are required to be appointed, provisional or temporary representatives under the SFA, unless exempted.
Pursuant to such draft provisions, there shall be a three-year interim period from July 1, 2024 to June 30, 2027 for the existing companies to adjust their periods of capital contribution.
Pursuant to such provisions, there shall be a three-year interim period from July 1, 2024 to June 30, 2027 for the existing companies to adjust their periods of capital contribution.
Any Internet-based information service provider in violation of the present Provisions shall be punished in accordance with relevant laws and administrative regulations. ​ 137 Table of Contents On December 29, 2017, the Information Security Technology — Personal Information Security Specification, or the China Specification, was promulgated by the General Administration of Quality Supervision, Inspection and Quarantine, which was last amended on March 6, 2020 and came into effect on October 1, 2020.
Any Internet-based information service provider in violation of the present Provisions shall be punished in accordance with relevant laws and administrative regulations. 136 Table of Contents On December 29, 2017, the Information Security Technology — Personal Information Security Specification, or the China Specification, was promulgated by the General Administration of Quality Supervision, Inspection and Quarantine, which was last amended on March 6, 2020 and came into effect on October 1, 2020.
For Hong Kong-based clients who apply to open trading accounts with us online on Futubull , in addition to submitting personal identity information and documents, we require each prospective client to link his or her personal bank account opened with a qualified bank in Hong Kong or other eligible jurisdictions with the trading account to be opened with us and transfer no less than HK$10,000 or US$1,500.
For Hong Kong-based clients who apply to open brokerage accounts with us online on Futubull , in addition to submitting personal identity information and documents, we require each prospective client to link his or her personal bank account opened with a qualified bank in Hong Kong or other eligible jurisdictions with the brokerage account to be opened with us and transfer no less than HK$10,000 or US$1,500.
Participation in Underwritten Offerings Broker-dealers that act as underwriters or selling group members in SEC-registered, underwritten offerings are required to comply with various SEC rules governing such offerings.
Participation in Underwritten Offerings Broker-dealers that act as underwriters or selling group members in SEC-registered, underwritten offerings are required to comply with various SEC rules governing such offering participation.
In addition, we also conduct offline advertising via outdoor bulletin boards, magazines, campus promotions and television commercials, which plays an important role in generating brand exposure. We also conduct promotions and marketing campaigns on our platform from time to time, such as offering free commissions to clients who open trading accounts with us within a certain period of time.
In addition, we also conduct offline advertising via outdoor bulletin boards, magazines, campus promotions and television commercials, which plays an important role in generating brand exposure. We also conduct promotions and marketing campaigns on our platform from time to time, such as offering free commissions to clients who open brokerage accounts with us within a certain period of time.
Moomoo Financial Singapore shall immediately inform the MAS when it becomes aware of the occurrence of any of the following: (i) where any offence is committed by or any disciplinary action is taken against Moomoo Financial Singapore or any of its officers or representatives, whether in Singapore or elsewhere; 152 Table of Contents (ii) where Moomoo Financial Singapore or any of its officers or representatives is the subject of an investigation or when any civil or criminal proceedings are instituted against Moomoo Financial Singapore or any of its officers or representatives, whether in Singapore or elsewhere; (iii) where there is any breach of any laws or regulations, business rules or codes of conduct, whether in Singapore or elsewhere; or (iv) any other matter that would affect Moomoo Financial Singapore or any of its officers’ or representatives’ ability to meet the criteria set out in the Guidelines on Fit and Proper Criteria issued by MAS. 8.
Moomoo Financial Singapore shall immediately inform the MAS when it becomes aware of the occurrence of any of the following: (i) where any offence is committed by or any disciplinary action is taken against Moomoo Financial Singapore or any of its officers or representatives, whether in Singapore or elsewhere; (ii) where Moomoo Financial Singapore or any of its officers or representatives is the subject of an investigation or when any civil or criminal proceedings are instituted against Moomoo Financial Singapore or any of its officers or representatives, whether in Singapore or elsewhere; (iii) where there is any breach of any laws or regulations, business rules or codes of conduct, whether in Singapore or elsewhere; or (iv) any other matter that would affect Moomoo Financial Singapore or any of its officers’ or representatives’ ability to meet the criteria set out in the Guidelines on Fit and Proper Criteria issued by MAS. 8.
Copyright On September 7, 1990, the SCNPC promulgated the PRC Copyright Law, which was last amended on November 11, 2020 and such amendment became effective on June 1, 2021, and the Implementation of Copyright Law of PRC, was last amended on January 30, 2013 and became effective on March 1, 2013. 138 Table of Contents On May 18, 2006, the State Council promulgated the Regulations on the Protection of the Right to Network Dissemination of Information, as amended on January 30, 2013.
Copyright On September 7, 1990, the SCNPC promulgated the PRC Copyright Law, which was last amended on November 11, 2020 and such amendment became effective on June 1, 2021, and the Implementation of Copyright Law of PRC, was last amended on January 30, 2013 and became effective on March 1, 2013. 137 Table of Contents On May 18, 2006, the State Council promulgated the Regulations on the Protection of the Right to Network Dissemination of Information, as amended on January 30, 2013.
Each new employee is assigned a mentor, and periodic mentor training sessions are conducted to empower these mentors. In July 2023, we also provided a full-time training program to fresh graduates over a week, to help them gain workplace skills, accumulate industry knowledge and quickly integrate into the working environment. ● Personal qualifications.
Each new employee is assigned a mentor, and periodic mentor training sessions are conducted to empower these mentors. In July 2024, we also provided a full-time training program to fresh graduates over a week, to help them gain workplace skills, accumulate industry knowledge and quickly integrate into the working environment. ● Personal qualifications.
The vast majority of our clients have opened accounts with us online. For further details on our verification procedures, see “—Risk Management—Securities Brokerage Service Risk Management.” Corporates that would like to open an account with us are required to satisfy our counterparty risk requirements, such as providing a deed of guarantee.
The vast majority of our clients have opened accounts with us online. For further details on our verification procedures, see “—Risk Management—Securities Brokerage Service Risk Management.” Corporates and institutions that would like to open an account with us are required to satisfy our counterparty risk requirements, such as providing a deed of guarantee.
Continuing Obligations An entity licensed under Part 4 of the SFA would typically expect that various ongoing operational obligations would apply, in addition to any specific conditions which the MAS may impose when granting its licence. There are different ongoing business conduct compliance obligations depending on the relevant licensing category.
Continuing Obligations An entity licensed under Part 4 of the SFA would typically expect that various ongoing operational obligations would apply, in addition to any specific conditions which the MAS may impose when granting its license. There are different ongoing business conduct compliance obligations depending on the relevant licensing category.
Users can complete an account opening application online in as little as three minutes on our platform. For investors who are residents in Hong Kong and other overseas markets where we operate, the two steps involved in opening trading accounts with us are set forth below: ● Step 1: Online application .
Users can complete an account opening application online in as little as three minutes on our platform. For investors who are residents in Hong Kong and other overseas markets where we operate, the two steps involved in opening brokerage accounts with us are set forth below: ● Step 1: Online application .
We support various fund transfer methods for payment of Hong Kong dollar, US dollar, offshore RMB, Singapore dollar, Australian dollar, Japanese Yen and Canadian dollar. For payment from Hong Kong bank accounts, we support fund transfer via electronic direct debit authentication (eDDA), bank-securities account transfer, fast payment system (FPS), internet banking, ATM/over-the-counter transfer and cheque.
We support various fund transfer methods for payment of Hong Kong dollar, US dollar, offshore RMB, Singapore dollar, Australian dollar, Japanese Yen, Malaysian Ringgit and Canadian dollar. For payment from Hong Kong bank accounts, we support fund transfer via electronic direct debit authentication (eDDA), bank-securities account transfer, fast payment system (FPS), internet banking, ATM/over-the-counter transfer and cheque.
Protecting Privacy of Customer Data and Information Regulation S-P requires broker-dealers to provide their customers with a copy of their privacy policy, which describes among other things what non-public information about customers is collected by the broker-dealer, and what non-public information might be shared with affiliates or third parties.
Protecting Privacy of Customer Data and Information Exchange Act Regulation S-P requires broker-dealers to provide their customers with a copy of their privacy policy, which describes among other things what non-public information about customers is collected by the broker-dealer, and what non-public information might be shared with affiliates or third parties.
Once the prospective client’s bank account information and other submitted documents match the information submitted during the online application, the online identification verification will be completed, and the trading account will be automatically opened. o Offline : A prospective client is required to meet a member of our verification team and conduct the abovementioned verification process with paper copies of critical documents.
Once the prospective client’s bank account information and other submitted documents match the information submitted during the online application, the online identification verification will be completed, and the brokerage account will be automatically opened. o Offline: A prospective client is required to meet a member of our verification team and conduct the abovementioned verification process with paper copies of critical documents.
Where the base capital falls below the base capital requirement or where the CMSL holder becomes aware that the base capital will fall below the base capital requirement, the MAS must be notified immediately. 155 Table of Contents Risk Capital Requirements Furthermore, a CMSL holder shall at all times meet the risk-based capital requirement in the SF(FMR)R upon obtaining its license.
Where the base capital falls below the base capital requirement or where the CMSL holder becomes aware that the base capital will fall below the base capital requirement, the MAS must be notified immediately. 154 Table of Contents Risk Capital Requirements Furthermore, a CMSL holder shall at all times meet the risk-based capital requirement in the SF(FMR)R upon obtaining its license.
On September 11, 2020, the Anti-monopoly Commission of the State Council issued the Anti-monopoly Compliance Guideline for Operators, which requires, under the PRC Anti-monopoly Law, operators to establish Anti-monopoly compliance management systems to prevent Anti- monopoly compliance risks. 144 Table of Contents On February 7, 2021, the Anti-monopoly Commission of the State Council published the Guidelines to Anti-Monopoly in the Field of Internet Platforms, or the Anti-Monopoly Guidelines for Internet Platforms.
On September 11, 2020, the Anti-monopoly Commission of the State Council issued the Anti-monopoly Compliance Guideline for Operators, which requires, under the PRC Anti-monopoly Law, operators to establish Anti-monopoly compliance management systems to prevent Anti- monopoly compliance risks. 143 Table of Contents On February 7, 2021, the Anti-monopoly Commission of the State Council published the Guidelines to Anti-Monopoly in the Field of Internet Platforms, or the Anti-Monopoly Guidelines for Internet Platforms.
The term “dealing in capital markets products” in turn means (whether as principal or agent) making or offering to make with any person, or inducing or attempting to induce any person to enter into or to offer to enter into any agreement for or with a view to acquiring, disposing of, entering into, effecting, arranging, subscribing for, or underwriting any capital markets product.
The term “dealing in capital markets products” in turn means (whether as principal or agent) making or offering to make with any person, or inducing or attempting to induce any person to enter into or to offer to enter into any agreement for or with a view to acquiring, disposing of, entering into, effecting, arranging, subscribing for, or underwriting any capital markets products.
The aforementioned “types of capital markets products” refer to each of the following classes: (a) securities; (b) units in a collective investment scheme; (c) exchange-traded derivatives contracts; (d) over-the-counter derivatives contracts; or (e) spot foreign exchange contracts for the purposes of leveraged foreign exchange trading. 153 Table of Contents 16.
The aforementioned “types of capital markets products” refer to each of the following classes: (a) securities; (b) units in a collective investment scheme; 152 Table of Contents (c) exchange-traded derivatives contracts; (d) over-the-counter derivatives contracts; or (e) spot foreign exchange contracts for the purposes of leveraged foreign exchange trading. 16.
The requirements of Direct Clearing Participantship are as follows: ● be an Options Trading Exchange Participant of the Stock Exchange of Hong Kong; ● have in place procedures and a back office computer system appropriate to the type of SEOCH Participant applied for; ● have a liquid capital of not less than the higher of : (a) its required liquid capital under the Securities and Futures (Financial Resources) Rules; or (b) HK$5,000,000; and ● contribute HK$1,500,000 to the reserve fund under the rules of SEOCH.
The requirements of Direct Clearing Participantship are as follows: ● be an Options Trading Exchange Participant of the Stock Exchange of Hong Kong; 117 Table of Contents ● have in place procedures and a back office computer system appropriate to the type of SEOCH Participant applied for; ● have a liquid capital of not less than the higher of: (a) its required liquid capital under the Securities and Futures (Financial Resources) Rules; or (b) HK$5,000,000; and ● contribute HK$1,500,000 to the reserve fund under the rules of SEOCH.
Any person who fails to confirm that a Singapore telephone number is not listed in the DNC Registry, prior to sending a specified message to that number, will be liable to a fine of up to S$10,000 or imprisonment for a term of up to 3 years or to both.
Any person who fails to confirm that a Singapore telephone number is not listed in the DNC Registry, prior to sending a specified message to that number, will be liable to a fine of up to S$10,000 per message sent or imprisonment for a term of up to 3 years or to both.
We also provide new share subscription services in relation to selected IPOs on the New York Stock Exchange, the Nasdaq Stock Market and the Singapore Exchange. We sustainably charge a competitive brokerage commission rate for online trading as compared to most of our market peers.
We also provide new share subscription services in relation to selected IPOs on the New York Stock Exchange, the Nasdaq Stock Market, Singapore Exchange, and Bursa Malaysia. We sustainably charge a competitive brokerage commission rate for online trading as compared to most of our market peers.
For offline account opening application, our verification staff will meet the prospective clients in person and interview them to verify the information submitted. On moomoo , all prospective clients can apply to open trading accounts with us online after submitting personal identity information and documents.
For offline account opening application, our verification staff will meet the prospective clients in person and interview them to verify the information submitted. On moomoo , all prospective clients can apply to open brokerage accounts with us online after submitting personal identity information and documents.
The purchasing power for each eligible client is determined based on the collateral held across all of his/her trading accounts and the pre-approved margin limit. The values of all collaterals and client account status are reflected in the system on a real-time basis.
The purchasing power for each eligible client is determined based on the collateral held across all of his/her brokerage accounts and the pre-approved margin limit. The values of all collaterals and client account status are reflected in the system on a real-time basis.
(4) Mr. Leaf Hua Li and Ms. Lei Li hold 85% and 15% equity interests, respectively, in each of Shenzhen Futu Network Technology Co., Ltd. and Hainan Futu Information Services Co., Ltd. Mr. Li is our founder, chairman of board of directors and chief executive officer. Ms. Lei Li is Mr. Li’s spouse.
(4) Mr. Leaf Hua Li and Ms. Lei Li hold 85% and 15% equity interests, respectively, in each of Shenzhen Futu Network Technology Co., Ltd. and Haikou Futu Information Services Co., Ltd. Mr. Li is our founder, chairman of board of directors and chief executive officer. Ms. Lei Li is Mr. Li’s spouse.
Our risk management committee empowers our risk management team, consisting of six employees having relevant experience between ten to 24 years, to execute these policies and procedures. Our risk management team meets regularly to examine credit, operational, compliance and enterprise risks and update guidelines and measures as necessary.
Our risk management committee empowers our risk management team, consisting of six employees having relevant experience between ten to 25 years, to execute these policies and procedures. Our risk management team meets regularly to examine credit, operational, compliance and enterprise risks and update guidelines and measures as necessary.
The Value-added Tax rates generally applicable are simplified as 17%, 11%, 6% and 0%, and the Value-added Tax rate applicable to the small-scale taxpayers is 3%. 142 Table of Contents On April 4, 2018, the Ministry of Finance and the SAT issued the Circular on Adjustment of Value-added Tax Rates.
The Value-added Tax rates generally applicable are simplified as 17%, 11%, 6% and 0%, and the Value-added Tax rate applicable to the small-scale taxpayers is 3%. 141 Table of Contents On April 4, 2018, the Ministry of Finance and the SAT issued the Circular on Adjustment of Value-added Tax Rates.
We automatically use the information provided by the user to perform know-your-client and anti-money laundering screening. If a user’s application passes the screening and/or complies with applicable laws, regulations and procedures, the user is approved for a trading account.
We automatically use the information provided by the user to perform know-your-client and anti-money laundering screening. If a user’s application passes the screening and/or complies with applicable laws, regulations and procedures, the user is approved for a brokerage account.
The Administrative Measures on Internet Information Services (2011 Revision), promulgated on September 25, 2000 and amended on January 8, 2011 by the State Council, further defines that commercial internet information services providers, which mean providers of information and/or other services to internet users with charge, shall obtain an Internet Content Provider License or the ICP License, from competent government authorities before providing any commercial internet content services within the PRC.
The Administrative Measures on Internet Information Services (2011 Revision), promulgated on September 25, 2000 and amended on January 8, 2011 and December 6, 2024 by the State Council, further defines that commercial internet information services providers, which mean providers of information and/or other services to internet users with charge, shall obtain an Internet Content Provider License or the ICP License, from competent government authorities before providing any commercial internet content services within the PRC.
We provide our cash sweep clients with interest income at certain interest rates, and the difference between interest income earned on our corporate accounts opened with banks and the clients’ interest income we pay to them at pre-agreed interest rates after deducting service fees becomes our income.
We provide our cash sweep clients with interest income at certain interest rates, and the difference between interest income earned on our corporate accounts opened with banks and the clients’ interest income we pay to them at pre-agreed interest rates after deducting service fees becomes our income. ● Robo Advisor .
(3) As of December 31, 2023, Shenzhen Futu Network Technology Co., Ltd. held a Valued-added Telecommunication Business Operation License, or an ICP License, a Radio and Television Program Production and Operation License and an Internet Culture Operation License; and Hainan Caixuetang Education Network Technology Co., Ltd. held an Internet Culture Operation License, a Radio and Television Program Production and Operation License, an ICP License and a Publication Operation License.
(3) As of December 31, 2024, Shenzhen Futu Network Technology Co., Ltd. held a Valued-added Telecommunication Business Operation License, or an ICP License, a Radio and Television Program Production and Operation License and an Internet Culture Operation License; and Hainan Caixuetang Education Network Technology Co., Ltd. held a Radio and Television Program Production and Operation License, an ICP License and a Publication Operation License.
The requirements for being accepted for registration and remaining registered as a China Connect Clearing Participant are as follows: ● to be a Direct Clearing Participant or a General Clearing Participant; ● to undertake to pay HKSCC such amount of Mainland Settlement Deposit, Mainland Security Deposit, Marks and Collateral as may be specified by HKSCC in accordance with the Operational Procedures of HKSCC in relation to CCASS; and ● to meet all other relevant China Connect Clearing Participant Registration Criteria.
The requirements for being accepted for registration and remaining registered as a China Connect Clearing Participant are as follows: ● to be a Direct Clearing Participant or a General Clearing Participant; ● to undertake to pay HKSCC such amount of Mainland Settlement Deposit, Mainland Security Deposit, Marks and Collateral as may be specified by HKSCC in accordance with the Operational Procedures of HKSCC in relation to CCASS; and 118 Table of Contents ● to meet all other relevant China Connect Clearing Participant Registration Criteria.
There are currently 3 types of financial advisory services under the FAA: a. advising others, either directly or through publications or writings, and whether in electronic, print or other form, concerning any investment product; (6) b. advising others by issuing or promulgating research analyses or research reports, whether in electronic, print or other form, concerning any investment product; and c. arranging of any contract of insurance in respect of life policies (other than a contract of reinsurance).
There are currently 3 types of financial advisory services under the FAA: a. advising others, either directly or through publications or writings, and whether in electronic, print or other form, concerning any investment product;(6) b. advising others by issuing or promulgating research analyses or research reports, whether in electronic, print or other form, concerning any investment product; and 155 Table of Contents c. arranging of any contract of insurance in respect of life policies (other than a contract of reinsurance).
After the corporate is onboarded, we monitor their transactions and conduct due diligence on an ongoing basis. Fund Transfer We provide timely and free fund transfer services to our clients, enabling them to capture fast-moving investment opportunities.
After the client is onboarded, we monitor their transactions and conduct due diligence on an ongoing basis. Fund Transfer We provide timely and free fund transfer services to our clients, enabling them to capture fast-moving investment opportunities.
By virtue of our technical edge, the online application process for opening an account can typically be completed in as little as three minutes. 100 Table of Contents Highly Stable, Scalable and Secure System Our distributed, cloud-based infrastructure is the foundation of our trading system, employing a number of interrelated servers to mitigate the risk of a single server disrupting the whole system.
By virtue of our technical edge, the online application process for opening an account can typically be completed in as little as three minutes. Highly Stable, Scalable and Secure System Our distributed, cloud-based infrastructure is the foundation of our trading system, employing a number of interrelated servers to mitigate the risk of a single server disrupting the whole system.
As of the date of this annual report, we had not been subject to any fines or other penalties due to non-compliance with health, safety or environmental regulations. We have adopted internal policies on (i) our governance regarding ESG risks, (ii) our ESG strategies and (iii) identification of the relevant metrics and targets in the long run.
As of the date of this annual report, we had not been subject to any fines or other penalties due to non-compliance with health, safety or environmental regulations. 103 Table of Contents We have adopted internal policies on (i) our governance regarding ESG risks, (ii) our ESG strategies and (iii) identification of the relevant metrics and targets in the long run.
Foreign investment and domestic investment in industries outside the scope of the Negative List would be treated equally. Pursuant to the Provisions on Administration of Foreign-Invested Telecommunications Enterprises, promulgated by the State Council with the latest amendments becoming effective in May 2022, the ultimate foreign equity ownership in a value-added telecommunication services provider must not exceed 50%.
Foreign investment and domestic investment in industries outside the scope of the Negative List would be treated equally. 129 Table of Contents Pursuant to the Provisions on Administration of Foreign-Invested Telecommunications Enterprises, promulgated by the State Council with the latest amendments becoming effective in May 2022, the ultimate foreign equity ownership in a value-added telecommunication services provider must not exceed 50%.
In addition, network platform operators who possess personal information of more than one million users, and intend to be listed at a foreign stock exchange must be subject to the cybersecurity review. On June 10, 2021, the SCNPC issued the Data Security Law of the PRC, or the Data Security Law, which came into effect on September 1, 2021.
In addition, network platform operators who possess personal information of more than one million users, and intend to be listed at a foreign stock exchange must be subject to the cybersecurity review. 132 Table of Contents On June 10, 2021, the SCNPC issued the Data Security Law of the PRC, or the Data Security Law, which came into effect on September 1, 2021.
We launched our securities lending services for U.S. listed securities in February 2017 and for Hong Kong listed securities in December 2020. To borrow securities, our clients must pledge cash or acceptable securities from their trading accounts with us.
We launched our securities lending services for U.S.-listed securities in February 2017 and for Hong Kong-listed securities in December 2020. To borrow securities, our clients must pledge cash or acceptable securities from their brokerage accounts with us.
The directly accountable person(s) in charge and other directly accountable personnel shall be reprimanded and subject to a fine. As announced by the CSRC on December 30, 2022, the CSRC has initiated inquiries on us regarding our cross-border operations in Mainland China, including the provision of cross-border securities business services for domestic, China-based investors.
The directly accountable person(s) in charge and other directly accountable personnel shall be reprimanded and subject to a fine. 126 Table of Contents As announced by the CSRC on December 30, 2022, the CSRC has initiated inquiries on us regarding our cross-border operations in Mainland China, including the provision of cross-border securities business services for domestic, China-based investors.
The categories of activities regulated under the SFA are set out under Part 1 of the Second Schedule to the SFA as follows: (1) dealing in capital markets products; (2) advising on corporate finance; (3) fund management; (4) real estate investment trust management; (5) product financing; (6) providing credit rating services; and (7) providing custodial services.
The categories of activities regulated under the SFA are set out under Part 1 of the Second Schedule to the SFA as follows: (1) dealing in capital markets products; (2) advising on corporate finance; (3) fund management; (4) real estate investment trust management; 149 Table of Contents (5) product financing; (6) providing credit rating services; and (7) providing custodial services.
CMS101000) and is licensed under the SFA to conduct the following regulated activities: (1) dealing in capital markets products; (2) product financing; and (3) providing custodial services. ​ 150 Table of Contents Under the SFA, “capital markets products” include, amongst others, securities ,(1) units in a collective investment scheme, derivatives contracts, and spot foreign exchange contracts for the purposes of leveraged foreign exchange trading.
CMS101000) and is licensed under the SFA to conduct the following regulated activities: (1) dealing in capital markets products; (2) product financing; and (3) providing custodial services. Under the SFA, “capital markets products” include, amongst others, securities,(1) units in a collective investment scheme, derivatives contracts, and spot foreign exchange contracts for the purposes of leveraged foreign exchange trading.
FINRA rules supplement Regulation T, particularly with respect to the maintenance margin required. In addition, broker-dealers are free to impose their own margin requirements that are more restrictive than those required by Regulation T or FINRA.
FINRA rules supplement Regulation T, particularly with respect to the maintenance margin required. In addition, broker-dealers are free to impose their own margin requirements that are more restrictive than those set pursuant to Regulation T or by FINRA.
Further, under Section 6(4) of the FAA, a person who contravenes Section 6(1) will be liable on conviction to a maximum fine of S$75,000 or imprisonment for a term of up to 3 years or both. ​ 156 Table of Contents The term “financial adviser” generally refers to a person who carries on a business of providing any financial advisory service under the FAA.
Further, under Section 6(4) of the FAA, a person who contravenes Section 6(1) will be liable on conviction to a maximum fine of S$75,000 or imprisonment for a term of up to 3 years or both. The term “financial adviser” generally refers to a person who carries on a business of providing any financial advisory service under the FAA.
While specific provisions may differ, broadly speaking, these above regulations generally: (i) prohibit financial institutions from entering into transactions with or relating to a sanctioned person; (ii) prohibit financial institutions from entering into transactions that have a specific purpose which is being targeted by the sanctions rule; or (iii) require financial institutions to freeze assets that may be in their possession or control, where the assets belong to or are controlled by a sanctioned person or where the assets are for the specific purpose that the sanctions rule is targeting, and to notify the authorities accordingly.
While specific provisions may differ, broadly speaking, these above regulations generally: (i) prohibit financial institutions from entering into transactions with or relating to a sanctioned person; 158 Table of Contents (ii) prohibit financial institutions from entering into transactions that have a specific purpose which is being targeted by the sanctions rule; or (iii) require financial institutions to freeze assets that may be in their possession or control, where the assets belong to or are controlled by a sanctioned person or where the assets are for the specific purpose that the sanctions rule is targeting, and to notify the authorities accordingly.
GAAP, and have consolidated the financial results of these entities in our consolidated financial statements in accordance with U.S. GAAP. We operate our business mainly through Futu Securities, which is a HK SFC-regulated entity that holds the relevant licenses related to our securities brokerage and wealth management product distribution business.
GAAP, and have consolidated the financial results of these entities in our consolidated financial statements in accordance with U.S. GAAP. 82 Table of Contents We operate our business mainly through Futu Securities, which is a HK SFC-regulated entity that holds the relevant licenses related to our securities brokerage and wealth management product distribution business.
Our trading system can automatically pledge cross-market account assets so that the value in a client’s multiple trading accounts, which may include cash in different currencies and acceptable securities listed on different markets, will be aggregated when calculating the value of the client’s collateral based on real time market foreign exchange rates.
Our trading system can automatically pledge cross-market assets so that the value in a client’s brokerage account, which may include cash in different currencies and acceptable securities listed on different markets, will be aggregated when calculating the value of the client’s collateral based on real-time market foreign exchange rates.
In addition, as part of our carbon neutrality initiatives, we have taken steps to deal with transition risks arisen from accelerated transformation to low-carbon lifestyle globally. 103 Table of Contents We endeavor to limit our carbon emissions and promote green operations during the ordinary course of business and it has become part of our corporate culture.
In addition, as part of our carbon neutrality initiatives, we have taken steps to deal with transition risks arisen from accelerated transformation to low-carbon lifestyle globally. We endeavor to limit our carbon emissions and promote green operations during the ordinary course of business and it has become part of our corporate culture.
We also encourage and sponsor our employees to further their education and obtain additional qualifications, including professional and recognized qualifications within the financial industry. Health, safety and wellbeing It is our priority to protect the physical and mental health, safety and wellbeing of our employees, and we have implemented various internal policies and measures accordingly, including: ● Healthy work-life balance.
We also encourage and sponsor our employees to further their education and obtain additional qualifications, including professional and recognized qualifications within the financial industry. 105 Table of Contents Health, safety and wellbeing It is our priority to protect the physical and mental health, safety and wellbeing of our employees, and we have implemented various internal policies and measures accordingly, including: ● Healthy work-life balance.
See “Item 3. Key Information—D. Risk Factors—Risks Related to our Corporate Structure” for further details. 168 Table of Contents Loss Sharing . Under the relevant PRC laws and regulations, none of our company and the WFOE is legally required to share the losses of, or provide financial support to, the Consolidated Affiliated Entities.
See “Item 3. Key Information—D. Risk Factors—Risks Related to our Corporate Structure” for further details. Loss Sharing . Under the relevant PRC laws and regulations, none of our company and the WFOE is legally required to share the losses of, or provide financial support to, the Consolidated Affiliated Entities.
Set out below is a breakdown of our IPO distribution activity as an underwriter during the period presented: ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ 2021 2022 2023 Number of IPO transactions 52 42 37 ​ We promote global offerings through multiple channels including targeted push notifications and professional investor roadshows, and keep the lead underwriters updated on the orders placed with us on a daily basis.
Set out below is a breakdown of our IPO distribution activity as an underwriter during the period presented: ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31 ​ 2022 2023 2024 Number of IPO transactions 42 37 40 ​ We promote global offerings through multiple channels, including targeted push notifications and professional investor roadshows, and keep the lead underwriters updated on the orders placed with us on a daily basis.
The principals and employees of U.S. broker-dealers are also required to be licensed with FINRA and the applicable states unless their conduct is limited to ministerial activities. There are a variety of individual license categories for both supervisors and other employees, each of which requires the individual to pass a specific examination.
The principals and employees of U.S. broker-dealers are also required to be licensed with FINRA and the applicable states unless their conduct is limited to ministerial activities. There are a variety of individual license categories for both supervisors and other employees, each of which requires the individual to pass a specific qualification exam.
Moomoo Financial Singapore shall immediately inform MAS of any matter which may adversely affect its financial position to a material extent. 5. Moomoo Financial Singapore shall conduct its business in such a manner as to avoid conflicts of interests, and should such conflicts arise, shall ensure that they are resolved fairly and equitably. 6.
Moomoo Financial Singapore shall immediately inform MAS of any matter which may adversely affect its financial position to a material extent. 5. Moomoo Financial Singapore shall conduct its business in such a manner as to avoid conflicts of interests, and should such conflicts arise, shall ensure that they are resolved fairly and equitably. 151 Table of Contents 6.
We attach great importance to our marketing promotional efforts which became increasingly important during our international expansion. We have developed a proprietary and automated technology infrastructure encompassing every aspect of our business operation, from account opening, fund transfer, trading and investment to risk management. Mr.
We attach great importance to our marketing promotional efforts which became increasingly important during our international expansion. 84 Table of Contents We have developed a proprietary and automated technology infrastructure encompassing every aspect of our business operation, from account opening, fund transfer, trading and investment to risk management. Mr.
If convicted under Section 55 of the CDSA, individuals will be liable to a maximum fine of S$150,000 or imprisonment for a term of up to 3 years, or both, while non-individuals will be liable to a maximum fine of S$300,000. 158 Table of Contents In addition to any criminal liability, the CDSA also allows for the confiscation of proceeds of crime.
If convicted under Section 55 of the CDSA, individuals will be liable to a maximum fine of S$150,000 or imprisonment for a term of up to 3 years, or both, while non-individuals will be liable to a maximum fine of S$300,000. In addition to any criminal liability, the CDSA also allows for the confiscation of proceeds of crime.
In this annual report, we refer to Shenzhen Futu and Hainan Futu as the VIEs and the related contractual arrangements as the Contractual Arrangements. For more details, see “Item 4. Information on the Company—C.
In this annual report, we refer to Shenzhen Futu and Haikou Futu as the VIEs and the related contractual arrangements as the Contractual Arrangements. For more details, see “Item 4. Information on the Company—C.
We will also review our decisions, should the relevant person(s) disagree with the results of our internal investigations. 105 Table of Contents Proper business practices We have implemented internal control policies in relation to our business operations, including anti-corruption and compliance, anti-money laundering, anti-bribery, fraud, business conduct and ethics.
We will also review our decisions, should the relevant person(s) disagree with the results of our internal investigations. Proper business practices We have implemented internal control policies in relation to our business operations, including anti-corruption and compliance, anti-money laundering, anti-bribery, fraud, business conduct and ethics.
Accordingly, there can be no assurance that the PRC regulatory authorities will not in the future take a view that is contrary to or otherwise different from the above opinion. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure.” 170 Table of Contents D. Property, Plant and Equipment Our corporate headquarters are located in Hong Kong.
Accordingly, there can be no assurance that the PRC regulatory authorities will not in the future take a view that is contrary to or otherwise different from the above opinion. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure.” D. Property, Plant and Equipment Our corporate headquarters are located in Hong Kong.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe results of operations in any year are not necessarily indicative of our future trends. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ HK$ % HK$ % HK$ US$ % ​ (in thousands, except for percentages) Revenues Brokerage commission and handling charge income 3,913,027 55.0 4,007,642 52.6 3,944,779 505,035 39.4 Interest income 2,518,198 35.4 3,214,327 42.2 5,536,422 708,807 55.3 Other income 684,095 9.6 392,058 5.2 527,217 67,498 5.3 Total revenues 7,115,320 100.0 7,614,027 100.0 10,008,418 1,281,340 100.0 Costs ​ ​ ​ ​ ​ ​ ​ Brokerage commission and handling charge expenses (572,159) (8.0) (329,789) (4.4) (249,567) (31,951) (2.5) Interest expenses (376,902) (5.3) (292,503) (3.8) (910,759) (116,601) (9.0) Processing and servicing costs (257,003) (3.6) (373,840) (4.9) (375,904) (48,126) (3.8) Total costs (1,206,064) (16.9) (996,132) (13.1) (1,536,230) (196,678) (15.3) Total gross profit 5,909,256 83.1 6,617,895 86.9 8,472,188 1,084,662 84.7 Operating expenses ​ ​ ​ ​ ​ ​ ​ Research and development expenses (1) (805,325) (11.3) (1,222,077) (16.1) (1,440,893) (184,472) (14.4) Selling and marketing expenses (1) (1,392,070) (19.6) (895,772) (11.8) (710,348) (90,943) (7.1) General and administrative expenses (1) (529,048) (7.4) (931,144) (12.1) (1,313,464) (168,158) (13.1) Total operating expenses (2,726,443) (38.3) (3,048,993) (40.0) (3,464,705) (443,573) (34.6) Others, net (2) 2,478 (0.0) (210,295) (2.8) 33,442 4,281 0.3 Income before income tax expense and share of loss from equity method investment 3,185,291 44.8 3,358,607 44.1 5,040,925 645,370 50.4 Income tax expense (375,081) (5.3) (413,962) (5.5) (748,479) (95,825) (7.5) Share of loss from equity method investment — — (17,752) (0.2) (13,497) (1,728) (0.1) Net income 2,810,210 39.5 2,926,893 38.4 4,278,949 547,817 42.8 Note: (1) Share-based compensation expenses were allocated as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ HK$ HK$ HK$ US$ ​ (in thousands) Selling and marketing expenses 9,138 15,204 20,238 2,591 Research and development expenses 75,755 145,226 201,033 25,737 General and administrative expenses ​ 14,020 ​ 44,099 ​ 69,560 ​ 8,906 Total 98,913 204,529 290,831 37,234 ​ 179 Table of Contents Year ended December 31, 2023 compared to year ended December 31, 2022 Revenues Total revenues were HK$10,008.4 million (US$1,281.3 million) in 2023, an increase of 31.4% from HK$7,614.0 million in 2022.
Biggest changeThe results of operations in any year are not necessarily indicative of our future trends. 178 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ HK$ % HK$ % HK$ US$ % ​ (in thousands, except for percentages) Revenues Brokerage commission and handling charge income 4,007,642 52.6 3,944,779 39.4 6,044,746 778,190 44.5 Interest income 3,214,327 42.2 5,536,422 55.3 6,666,864 858,280 49.1 Other income 392,058 5.2 527,217 5.3 878,515 113,098 6.4 Total revenues 7,614,027 100.0 10,008,418 100.0 13,590,125 1,749,568 100.0 Costs ​ ​ ​ ​ ​ ​ ​ Brokerage commission and handling charge expenses (329,789) (4.4) (249,567) (2.5) (341,238) (43,930) (2.5) Interest expenses (292,503) (3.8) (910,759) (9.0) (1,617,450) (208,228) (11.9) Processing and servicing costs (373,840) (4.9) (375,904) (3.8) (486,783) (62,668) (3.6) Total costs (996,132) (13.1) (1,536,230) (15.3) (2,445,471) (314,826) (18.0) Total gross profit 6,617,895 86.9 8,472,188 84.7 11,144,654 1,434,742 82.0 Operating expenses ​ ​ ​ ​ ​ ​ ​ Research and development expenses (1) (1,222,077) (16.1) (1,440,893) (14.4) (1,493,620) (192,286) (11.0) Selling and marketing expenses (1) (895,772) (11.8) (710,348) (7.1) (1,409,313) (181,432) (10.4) General and administrative expenses (1) (931,144) (12.1) (1,313,464) (13.1) (1,620,017) (208,558) (11.9) Total operating expenses (3,048,993) (40.0) (3,464,705) (34.6) (4,522,950) (582,276) (33.3) Income from operations ​ 3,568,902 ​ 46.9 ​ 5,007,483 ​ 50.1 ​ 6,621,704 ​ 852,466 ​ 48.7 Others, net (210,295) (2.8) 33,442 0.3 (86,372) (11,119) (0.6) Income before income tax expense and share of loss from equity method investments 3,358,607 44.1 5,040,925 50.4 6,535,332 841,347 48.1 Income tax expense (413,962) (5.5) (748,479) (7.5) (998,342) (128,525) (7.3) Share of loss from equity method investments (17,752) (0.2) (13,497) (0.1) (103,934) (13,380) (0.8) Net income 2,926,893 38.4 4,278,949 42.8 5,433,056 699,442 40.0 Notes: (1) Share-based compensation expenses were allocated as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ HK$ HK$ HK$ US$ ​ (in thousands) Research and development expenses 145,226 201,033 230,830 29,717 General and administrative expenses ​ 44,099 ​ 69,560 ​ 81,966 ​ 10,552 Selling and marketing expenses ​ 15,204 ​ 20,238 ​ 22,130 ​ 2,849 Total 204,529 290,831 334,926 43,118 ​ Year ended December 31, 2024 compared to year ended December 31, 2023 Revenues Total revenues were HK$13,590.1 million (US$1,749.6 million), an increase of 35.8% from HK$10,008.4 million in 2023.
Interest expenses Interest expenses primarily consist of interest expenses of borrowings from commercial banks, other licensed financial institutions and other parties to fund our margin financing business, securities lending business and IPO financing business.
Interest expenses Interest expenses primarily consist of interest expenses of borrowings from commercial banks, other licensed financial institutions and other parties to fund our margin financing business, securities lending business, IPO and other financing business.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2023 that are reasonably likely to have a material and adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information not necessarily to be indicative of future results of operations or financial conditions.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2024 that are reasonably likely to have a material and adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information not necessarily to be indicative of future results of operations or financial conditions.
Our critical accounting estimates are described below. The critical accounting estimates should be read in conjunction with our risk factors as disclosed in “Item 3. Key Information—D. Risk Factors.” See Note 2 to our consolidated financial statements for the year ended December 31, 2023 for more information on our critical accounting policies.
Our critical accounting estimates are described below. The critical accounting estimates should be read in conjunction with our risk factors as disclosed in “Item 3. Key Information—D. Risk Factors.” See Note 2 to our consolidated financial statements for the year ended December 31, 2024 for more information on our critical accounting policies.
Our ability to effectively manage the quality of collateral and to collect loans and advances when due is critical to our business, prospects and financial conditions. ​ 174 Table of Contents Key Components of Results of Operations Revenues We generate revenues primarily from our online brokerage and margin financing services.
Our ability to effectively manage the quality of collateral and to collect loans and advances when due is critical to our business, prospects and financial conditions. 172 Table of Contents Key Components of Results of Operations Revenues We generate revenues primarily from our online brokerage and margin financing services.
Other income Other income primarily consists of (i) enterprise public relations service charge income, (ii) underwriting fee income, (iii) IPO subscription service charge income, (iv) funds distribution service income, (v) currency exchange service income, and (vi) market information and data income.
Other income Other income primarily consists of (i) enterprise public relations service charge income, (ii) underwriting fee income, (iii) IPO subscription service charge income, (iv) funds distribution service income, (v) currency exchange service income, (vi) market information and data income, and (vii) technology service income.
Our actual results and the timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those we describe under “Item 3. Key Information—D. Risk Factors” and elsewhere in this annual report. A.
Our actual results and the timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those we describe under “Item 3. Key Information—D. Risk Factors” and elsewhere in this annual report. 169 Table of Contents A.
Brokerage commission and handling charge income. Brokerage commission and handling charge income was HK$3,944.8 million (US$505.0 million) in 2023, a decrease of 1.6% from HK$4,007.6 million in 2022. The decrease was mainly due to lower trading volume, largely offset by higher blended commission rate. The blended commission rate increased from 8.3 bps in 2022 to 9.3 bps in 2023.
Brokerage commission and handling charge income. Brokerage commission and handling charge income was HK$3,944.8 million in 2023, a decrease of 1.6% from HK$4,007.6 million in 2022. The decrease was mainly due to lower trading volume, largely offset by higher blended commission rate. The blended commission rate increased from 8.3 bps in 2022 to 9.3 bps in 2023.
The increase was primarily due to an increase in headcount for general and administrative personnel, especially in new markets. Income tax expense We had income tax expense of HK$748.5 million (US$95.8 million) in 2023, compared to HK$414.0 million in 2022, primarily due to the 50.5% year-over-year increase in our income before income tax expenses.
The increase was primarily due to an increase in headcount for general and administrative personnel, especially in new markets. Income tax expense We had income tax expense of HK$748.5 million in 2023, compared to HK$414.0 million in 2022, primarily due to the 50.5% year-over-year increase in our income before income tax expenses.
We will continue to make capital expenditures to meet the expected growth of our business. 186 Table of Contents Loans and Advances Our loans and advances include margin loans, IPO loans extended to clients and other advances, mainly collateralized by securities and are carried at the amortized cost, net of an allowance for credit losses.
We will continue to make capital expenditures to meet the expected growth of our business. 186 Table of Contents Loans and Advances Our loans and advances include margin loans and other advances, mainly collateralized by securities and are carried at the amortized cost, net of an allowance for credit losses.
In addition, our ability to expand into various markets will enable us to respond to changes in the different markets in terms of client demand and client preferences to remain competitive. 173 Table of Contents Investment in technology and talent Our technology is critical for us to retain and attract clients.
In addition, our ability to expand into various markets will enable us to respond to changes in the different markets in terms of client demand and client preferences to remain competitive. Investment in technology and talent Our technology is critical for us to retain and attract clients.
Other than the above, we did not have any significant capital and other commitments, long-term obligations, or guarantees as of December 31, 2023.
Other than the above, we did not have any significant capital and other commitments, long-term obligations, or guarantees as of December 31, 2024.
For more information regarding the collateralized transactions, see Note 17 to our consolidated financial statements included in this annual report. 187 Table of Contents We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our consolidated financial statements.
For more information regarding the collateralized transactions, see Note 17 to our consolidated financial statements included in this annual report. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our consolidated financial statements.
Our total client asset balance is affected by a number of factors, including, primarily, the number of our paying clients and to a lesser extent, the level of per capita disposable income as well as the engagement and loyalty of our clients.
Our total client asset balance is affected by a number of factors, including, primarily, the number of our funded accounts and to a lesser extent, the level of per capita disposable income as well as the engagement and loyalty of our clients.
As of December 31, 2023, all of the regulated operating subsidiaries were in compliance with their respective regulatory capital requirements.
As of December 31, 2024, all of the regulated operating subsidiaries were in compliance with their respective regulatory capital requirements.
We generate IPO subscription service charge income from provision of new share subscription services in relation to IPOs in the Hong Kong capital market. We generate funds distribution service income from our wealth management product distribution business. We generate currency exchange service income from providing currency exchange services to our paying clients.
We generate IPO subscription service charge income from provision of new share subscription services in relation to IPOs in the Hong Kong capital market. We generate funds distribution service income from our wealth management product distribution business. We generate currency exchange service income from providing currency exchange services to our clients with funded accounts.
As of December 31, 2023, 6.9% of our cash and cash equivalents were held in China, and 0.3% were held by the Consolidated Affiliated Entities. Although we consolidate the results of the Consolidated Affiliated Entities, we only have access to the assets or earnings of the Consolidated Affiliated Entities through the Contractual Arrangements. See “Item 4. Information on the Company—C.
As of December 31, 2024, 1.3% of our cash and cash equivalents were held in China, and 0.1% were held by the Consolidated Affiliated Entities. Although we consolidate the results of the Consolidated Affiliated Entities, we only have access to the assets or earnings of the Consolidated Affiliated Entities through the Contractual Arrangements. See “Item 4. Information on the Company—C.
In March 2022, our board of directors authorized a new share repurchase program under which our company may repurchase up to US$500 million worth of ADSs, until December 31, 2023. As of December 31, 2023, we have repurchased US$364.8 million worth of ADSs in open market transactions in accordance with the authorization under this share repurchase program.
As of December 31, 2022, we had repurchased US$300 million worth of ADSs in open market transactions in accordance with the authorization under this share repurchase program. In March 2022, our board of directors authorized a new share repurchase program under which our company may repurchase up to US$500 million worth of ADSs, until December 31, 2023.
Selling and marketing expenses consist primarily of advertising and promotion costs, as well as payroll, rental and related expenses for selling and marketing personnel. Advertising costs primarily consist of costs of online advertising and offline promotional events. 176 Table of Contents General and administrative expenses .
Selling and marketing expenses consist primarily of advertising and promotion costs, as well as payroll, rental and related expenses for selling and marketing personnel. Advertising costs primarily consist of costs of online advertising and offline promotional events. General and administrative expenses .
Interest income We earn interest income primarily from margin financing and securities lending services, IPO financing, stock-pledged loan, treasury bills and deposits with banks, which are recorded on an accrual basis and are included in interest income in the consolidated statements of comprehensive income. Interest income is recognized as it is accrued over time using the effective interest method.
Interest income We earn interest income primarily from margin financing and securities lending services and deposits with banks, which are recorded on an accrual basis and are included in interest income in the consolidated statements of comprehensive income. Interest income is recognized as it is accrued over time using the effective interest method.
We have entered into short-term borrowings primarily to support our margin financing business in Hong Kong. Our short-term borrowings bear weighted average interest rates of 1.15%, 3.86% and 5.30% as of December 31, 2021, 2022 and 2023, respectively.
We have entered into short-term borrowings primarily to support our margin financing business in Hong Kong. Our short-term borrowings bear weighted average interest rates of 3.86%, 5.30% and 4.18% as of December 31, 2022, 2023 and 2024, respectively.
We will fund the repurchases from our existing cash balance. Under the new share repurchase program, our company may repurchase ADSs from time to time in the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations.
Under the new share repurchase program, our company may repurchase ADSs from time to time in the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations.
Processing and servicing costs Processing and servicing costs consist of market information and data fees, data transmission fees, cloud service fees, system cost and SMS (short messaging service) fees paid to stock exchanges and data and other service providers.
Processing and servicing costs Processing and servicing costs mainly consist of market information and data fees, data transmission fees, cloud service fees and system cost paid to stock exchanges and data and other service providers.
The allowance for credit losses for the stock-pledged loans was nil and HK$5.0 million (US$0.6 million) as of December 31, 2022 and 2023, respectively.
The allowance for credit losses for the stock-pledged loans was HK$5.0 million and nil as of December 31, 2023 and 2024, respectively.
Research and development expenses were HK$1,440.9 million (US$184.5 million) in 2023, an increase of 17.9% from HK$1,222.1 million in 2022. The increase was primarily due to an increase in research and development headcount to support new product offering. 180 Table of Contents Selling and marketing expenses .
Research and development expenses . Research and development expenses were HK$1,440.9 million in 2023, an increase of 17.9% from HK$1,222.1 million in 2022. The increase was primarily due to an increase in research and development headcount to support new product offering. Selling and marketing expenses .
(2) The allowance for credit losses was HK$27.8 million and HK$45.9 million (US$5.9 million) as of December 31, 2022 and 2023, of which nil and HK$5,000 thousand relate to stock-pledged loans, respectively. Off-Balance Sheet Arrangements We have entered into various off-balance sheet arrangements in the ordinary course of business, primarily to meet the needs of our clients.
(2) The allowance for credit losses was HK$45.9 million and HK$85.3 million (US$11.0 million) as of December 31, 2023 and 2024, of which HK$5.0 million and nil relate to stock-pledged loans, respectively. Off-Balance Sheet Arrangements We have entered into various off-balance sheet arrangements in the ordinary course of business, primarily to meet the needs of our clients.
Selling and marketing expenses were HK$710.3 million (US$90.9 million) in 2023, a decrease of 20.7% from HK$895.8 million in 2022. The decrease was mainly due to slower paying client growth and lower customer acquisition costs. General and administrative expenses . General and administrative expenses were HK$1,313.5 million (US$168.2 million) in 2023, an increase of 41.1% from HK$931.1 million in 2022.
Selling and marketing expenses were HK$710.3 million in 2023, a decrease of 20.7% from HK$895.8 million in 2022. The decrease was mainly due to slower funded account growth and lower customer acquisition costs. General and administrative expenses . General and administrative expenses were HK$1,313.5 million in 2023, an increase of 41.1% from HK$931.1 million in 2022.
Our margin financing business is subject to influences from market factors such as market liquidity, interest rate as well as investor sentiment. 171 Table of Contents In addition, our business and results of operations are also affected by factors driving online brokerage demand in all markets we operate, such as the increasing number of affluent middle class residents, the growing number of retail investors having interests and needs in investing securities in global capital markets, the usage and penetration rate of the internet and mobile internet, the changing investor preferences with respect to trading and investment platforms and the competitive landscape, governmental policies and regulatory environment.
In addition, our business and results of operations are also affected by factors driving online brokerage demand in all markets we operate, such as the increasing number of affluent middle class residents, the growing number of retail investors having interests and needs in investing securities in global capital markets, the usage and penetration rate of the internet and mobile internet, the changing investor preferences with respect to trading and investment platforms and the competitive landscape, governmental policies and regulatory environment.
There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or, after execution, brought within the jurisdiction of the Cayman Islands. In addition, the Cayman Islands does not impose withholding tax on dividend payments.
There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or, after execution, brought within the jurisdiction of the Cayman Islands.
We continued to attract more margin financing and securities lending clients, which in turn strengthened our bargaining power against third-party funding and securities lenders and allowed us to optimize interest expenses.
We continued to expand our margin financing and securities lending client base, which in turn strengthened our bargaining power against third-party funding and securities lenders and allowed us to optimize interest expenses.
The capital expenditures in 2023 were primarily due to the purchase of computers and equipment. We intend to fund our future capital expenditures with our existing cash balance and proceeds from our securities offerings.
The capital expenditures in 2024 were primarily due to the purchase of office equipment, furniture and fixture. We intend to fund our future capital expenditures with our existing cash balance and proceeds from our securities offerings.
Operating expenses Total operating expenses were HK$3,464.7 million (US$443.6 million) in 2023, an increase of 13.6% from HK$3,049.0 million in 2022. The increase was primarily due to the increase in research and development expenses and general and administrative expenses as a result of our business growth. Research and development expenses .
Gross profit margin declined from 86.9% in 2022 to 84.7% in 2023. Operating expenses Total operating expenses were HK$3,464.7 million in 2023, an increase of 13.6% from HK$3,049.0 million in 2022. The increase was primarily due to the increase in research and development expenses and general and administrative expenses as a result of our business growth.
Investing activities Net cash used in investing activities in 2023 was HK$2.4 billion (US$312.9 million), primarily due to purchase of short-term investments of HK$4.8 billion (US$608.8 million), partially offset by the proceeds from disposal of short-term investments of HK$2.4 billion (US$309.5 million).
Net cash used in investing activities in 2023 was HK$2.4 billion, primarily due to purchase of short-term investments of HK$4.8 billion, partially offset by the proceeds from disposal of short-term investments of HK$2.4 billion.
We lease our office facilities under non-cancellable operating leases with various expiration dates through August 2027. Capital Expenditures Our capital expenditures are primarily incurred for purchase of property, equipment and intangible assets. Our capital expenditures were HK$70.5 million in 2021, HK$90.5 million in 2022 and HK$77.8 million (US$10.0 million) in 2023.
We lease our office facilities under non-cancellable operating leases with various expiration dates through March 2035. Capital Expenditures Our capital expenditures are primarily incurred for purchase of property, equipment and intangible assets. Our capital expenditures were HK$90.5 million in 2022, HK$77.8 million in 2023 and HK$167.5 million (US$21.6 million) in 2024.
Allowance for credit losses for the stock-pledged loans We extend stock-pledged loans to enterprises, and these loans pledged listed shares as collateral. As of December 31, 2022 and 2023, the gross amount of stock-pledged loans was HK$1,910.7 million and HK$1,912.6 million (US$244.9 million), respectively.
Allowance for credit losses for the stock-pledged loans We extend stock-pledged loans to enterprises, and these loans pledged listed shares as collateral. As of December 31, 2023 and 2024, the gross amount of stock-pledged loans was HK$1,912.6 million and HK$1,907.3 million (US$245.5 million), respectively.
The increase in interest income was mainly driven by higher interest income from bank deposits and securities lending business. Interest income derived from bank deposit and securities lending business increased by 138.0% from HK$1,486.1 million in 2022 to HK$3,536.2 million (US$452.7 million) in 2023, which was mainly attributable to the growing market interest rates amid rates hike. Other income .
Interest income derived from bank deposit and securities lending business increased by 138.0% from HK$1,486.1 million in 2022 to HK$3,536.2 million in 2023, which was mainly attributable to the growing market interest rates amid rates hike. Other income . Other income was HK$527.2 million in 2023, an increase of 34.5% from HK$392.1 million in 2022.
However, approval from or registration with competent government authorities is required where the Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.
However, approval from or registration with competent government authorities is required where the Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may at its discretion restrict access to foreign currencies for current account transactions in the future.
Ltd. ​ 1,761,901 ​ 258,553 ​ 1,503,348 ​ Where the relevant operating subsidiaries do not meet regulatory capital requirements, such subsidiaries may be faced with certain operational restrictions, including cessation of carrying on of business in any or all of the regulated activities permitted under their respective licenses.
Ltd. ​ 2,718,113 ​ 256,448 ​ 2,461,665 ​ Where the relevant operating subsidiaries do not meet regulatory capital requirements, such subsidiaries may be faced with certain operational restrictions, including cessation of carrying on of business in any or all of the regulated activities permitted under their respective licenses.
As of December 31, 2021, 2022 and 2023, respectively, our cash and cash equivalents were HK$4,555.1 million, HK$5,028.9 million and HK$4,937.5 million (US$632.1 million).
As of December 31, 2022, 2023 and 2024, respectively, our cash and cash equivalents were HK$5,028.9 million, HK$4,937.5 million and HK$11,688.4 million (US$1,504.7 million).
The increase was primarily attributable to higher fund distribution service income which was led by an increase of 82.3% of wealth management products held by our clients from HK$31.6 billion as of December 31, 2022 to HK$57.6 billion (US$7.4 billion) as of December 31, 2023.
The increase was primarily attributable to higher fund distribution service income which was led by an increase of 82.3% of wealth management products held by our clients from HK$31.6 billion as of December 31, 2022 to HK$57.6 billion as of December 31, 2023. Costs Total costs were HK$1,536.2 million in 2023, an increase of 54.2% from HK$996.1 million in 2022.
The principal non-cash items affecting the difference between our net income and our net cash generated from operating activities in 2022 were HK$204.5 million in share-based compensation expenses and HK$133.1 million in foreign change losses. Net cash generated from operating activities in 2021 was HK$6.0 billion, as compared to net income of HK$2.8 billion in the same year.
The principal non-cash items affecting the difference between our net income and our net cash generated from operating activities in 2022 were HK$204.5 million in share-based compensation expenses and HK$133.1 million in foreign change losses.
We conduct our operations primarily through our subsidiaries in Hong Kong, Singapore, the United States and the PRC, as well as through the Consolidated Affiliated Entities in China. As a result, Futu Holdings’ ability to pay dividends depends upon dividends paid by our subsidiaries in Hong Kong, Singapore, the United States and the PRC.
As a result, Futu Holdings’ ability to pay dividends depends upon dividends paid by our subsidiaries in Hong Kong, Singapore, the United States and the PRC.
Net cash used in financing activities in 2022 was HK$7.0 billion, primarily attributable to repayment of short-term borrowings of HK$74.7 billion and share repurchases of HK$3.1 billion, partially offset by proceeds of HK$70.8 billion from short-term borrowings. 185 Table of Contents Net cash generated from financing activities in 2021 was HK$10.6 billion, primarily attributable to proceeds of HK$53.5 billion from short-term borrowings and proceeds of HK$10.9 billion from our follow-on offering, partially offset by repayment of short-term borrowings of HK$52.6 billion.
Net cash generated from financing activities in 2023 was HK$2.3 billion, primarily attributable to proceeds of HK$79.6 billion from other borrowings, partially offset by repayment of other borrowings of HK$76.4 billion. 185 Table of Contents Net cash used in financing activities in 2022 was HK$7.0 billion, primarily attributable to repayment of short-term borrowings of HK$74.7 billion and share repurchases of HK$3.1 billion, partially offset by proceeds of HK$70.8 billion from short-term borrowings.
The increase in accounts payable to clients and brokers was due to the increase of cash deposits as a result of the expansion of our brokerage business. The increase of loans and advances was due to the expansion of our margin financing business.
The increase in loans and advances was due to the expansion of our margin financing business. The decrease in accounts payable to clients and brokers was mainly attributable to the decline in our clients’ cash deposits.
We also intend to further broaden our financial services footprint and launch new products and services. Our great success in the Hong Kong market laid a solid foundation for our international expansion into various markets. We launched moomoo , the international version of Futubull , in the United States, Singapore and Australia as our first steps.
We also intend to further broaden our financial services footprint and launch new products and services. 171 Table of Contents Our great success in the Hong Kong market laid a solid foundation for our international expansion into various markets.
The increase was mainly driven by higher expenses associated with our securities lending business from HK$209.8 million in 2022 to HK$737.8 million (US$94.5 million) in 2023. Processing and servicing costs . Processing and servicing costs were HK$375.9 million (US$48.1 million) in 2023, an increase of 0.6% from HK$373.8 million in 2022.
Interest expenses were HK$910.8 million in 2023, an increase of 211.4% from HK$292.5 million in 2022. The increase was mainly driven by higher expenses associated with our securities lending business from HK$209.8 million in 2022 to HK$737.8 million in 2023. Processing and servicing costs .
The increase in our system cost was offset by the cost saving from cloud service fee. Gross profit As a result of the foregoing, our total gross profit increased by 28.0% from HK$6,617.9 million in 2022 to HK$8,472.2 million (US$1,084.7 million) in 2023. Gross profit margin declined from 86.9% in 2022 to 84.7% in 2023.
Processing and servicing costs were HK$375.9 million in 2023, an increase of 0.6% from HK$373.8 million in 2022. The increase in our system cost was offset by the cost saving from cloud service fee. Gross profit As a result of the foregoing, our total gross profit increased by 28.0% from HK$6,617.9 million in 2022 to HK$8,472.2 million in 2023.
Hong Kong Our subsidiaries incorporated in Hong Kong, such as Futu Securities (Hong Kong) Limited, Futu Financial Limited, Futu Lending Limited, Futu Network Technology Limited and Futu Securities International (Hong Kong) Limited, are subject to Hong Kong profit tax on their profits arising from their business operations carried out in Hong Kong.
In addition, the Cayman Islands does not impose withholding tax on dividend payments. 176 Table of Contents Hong Kong Our subsidiaries incorporated in Hong Kong, such as Futu Securities (Hong Kong) Limited, Futu Financial Limited, Futu Lending Limited, Futu Network Technology Limited and Futu Securities International (Hong Kong) Limited, are subject to Hong Kong profit tax on their profits arising from their business operations carried out in Hong Kong.
The following table sets forth the components of our revenues by amounts and percentages of our total revenues for the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ HK$ % HK$ % HK$ US$ % ​ ​ (in thousands, except for percentages) Revenues: Brokerage commission and handling charge income 3,913,027 55.0 4,007,642 52.6 3,944,779 505,035 39.4 Interest income 2,518,198 35.4 3,214,327 42.2 5,536,422 708,807 55.3 Other income 684,095 9.6 392,058 5.2 527,217 67,498 5.3 Total revenues 7,115,320 100.0 7,614,027 100.0 10,008,418 1,281,340 100.0 ​ Brokerage commission and handling charge income Brokerage commission income primarily consists of commissions and execution fees from our clients for whom we act as executing and clearing brokers.
The following table sets forth the components of our revenues by amounts and percentages of our total revenues for the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ HK$ % HK$ % HK$ US$ % ​ ​ (in thousands, except for percentages) Revenues: Brokerage commission and handling charge income 4,007,642 52.6 3,944,779 39.4 6,044,746 778,190 44.5 Interest income 3,214,327 42.2 5,536,422 55.3 6,666,864 858,280 49.1 Other income 392,058 5.2 527,217 5.3 878,515 113,098 6.4 Total revenues 7,614,027 100.0 10,008,418 100.0 13,590,125 1,749,568 100.0 ​ Brokerage commission and handling charge income Brokerage commission income primarily consists of commissions and execution fees from our clients for whom we act as executing and clearing brokers.
The margin financing and securities lending balance is affected by factors including client asset balance, expansion of international markets and our ability to continue to secure funding and securities from third parties. 172 Table of Contents The net interest income from our margin financing and securities lending businesses is affected by our margin financing and securities lending balance, as well as annualized interest rates and interest spread we earn from margin financing and securities lending.
The margin financing and securities lending balance is affected by factors including client asset balance, expansion of international markets and our ability to continue to secure funding and securities from third parties.
Operating expenses The following table sets forth the components of our operating expenses by amounts and percentages of operating expenses for the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ HK$ % HK$ % HK$ US$ % ​ (in thousands, except for percentages) Operating expenses: Research and development expenses 805,325 29.5 1,222,077 40.1 1,440,893 184,472 41.6 Selling and marketing expenses 1,392,070 51.1 895,772 29.4 710,348 90,943 20.5 General and administrative expenses 529,048 19.4 931,144 30.5 1,313,464 168,158 37.9 Total operating expenses 2,726,443 100.0 3,048,993 100.0 3,464,705 443,573 100.0 ​ Research and development expenses .
Operating expenses The following table sets forth the components of our operating expenses by amounts and percentages of operating expenses for the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ HK$ % HK$ % HK$ US$ % ​ (in thousands, except for percentages) Operating expenses: Research and development expenses 1,222,077 40.1 1,440,893 41.6 1,493,620 192,286 33.0 Selling and marketing expenses 895,772 29.4 710,348 20.5 1,409,313 181,432 31.2 General and administrative expenses 931,144 30.5 1,313,464 37.9 1,620,017 208,558 35.8 Total operating expenses 3,048,993 100.0 3,464,705 100.0 4,522,950 582,276 100.0 ​ Research and development expenses .
In developing the macroeconomic scenario, significant judgment is also applied that take into consideration of a number of forecasted economic variables. Provision of income tax and valuation allowance for deferred tax asset Significant judgment is required in determining income tax expense based on tax laws in the various jurisdictions in which we operate.
Provision of income tax and valuation allowance for deferred tax asset Significant judgment is required in determining income tax expense based on tax laws in the various jurisdictions in which we operate.
We generate market information and data income primarily by providing fee-based market data services to users and clients. ​ 175 Table of Contents Costs The following table sets forth the components of our costs by amounts and percentages of costs for the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ HK$ % HK$ % HK$ US$ % ​ (in thousands, except for percentages) Costs: ​ ​ ​ Brokerage commission and handling charge expenses 572,159 47.4 329,789 33.1 249,567 31,951 16.2 Interest expenses 376,902 31.3 292,503 29.4 910,759 116,601 59.3 Processing and servicing costs 257,003 21.3 373,840 37.5 375,904 48,126 24.5 Total costs 1,206,064 100.0 996,132 100.0 1,536,230 196,678 100.0 ​ Brokerage commission and handling charge expenses Brokerage commission and handling charge expenses consist of fees charged by stock exchanges or executing brokers for our use of their clearing and settlement systems and expenses charged by commercial banks or stock exchanges for providing clearing and settlement services in connection with IPO subscriptions.
Costs The following table sets forth the components of our costs by amounts and percentages of costs for the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ HK$ % HK$ % HK$ US$ % ​ (in thousands, except for percentages) Costs: ​ ​ ​ Brokerage commission and handling charge expenses 329,789 33.1 249,567 16.2 341,238 43,930 14.0 Interest expenses 292,503 29.4 910,759 59.3 1,617,450 208,228 66.1 Processing and servicing costs 373,840 37.5 375,904 24.5 486,783 62,668 19.9 Total costs 996,132 100.0 1,536,230 100.0 2,445,471 314,826 100.0 ​ 175 Table of Contents Brokerage commission and handling charge expenses Brokerage commission and handling charge expenses consist of fees charged by stock exchanges or executing brokers for our use of their clearing and settlement systems and expenses charged by commercial banks or stock exchanges for providing clearing and settlement services in connection with IPO subscriptions.
Net income As a result of the foregoing, we had net income of HK$4,278.9 million (US$547.8 million) in 2023, compared to HK$2,926.9 million in 2022. Year ended December 31, 2022 compared to year ended December 31, 2021 Revenues Total revenues were HK$7,614.0 million in 2022, an increase of 7.0% from HK$7,115.3 million in 2021. Brokerage commission and handling charge income.
Net income As a result of the foregoing, we had net income of HK$5,433.1 million (US$699.4 million) in 2024, compared to HK$4,278.9 million in 2023, an increase of 27.0%. Year ended December 31, 2023 compared to year ended December 31, 2022 Revenues Total revenues were HK$10,008.4 million in 2023, an increase of 31.4% from HK$7,614.0 million in 2022.
The increase was primarily due to the increase in research and development expenses and general and administrative expenses as a result of our business growth. Research and development expenses . Research and development expenses were HK$1,222.1 million in 2022, an increase of 51.8% from HK$805.3 million in 2021.
The increase was primarily due to the increase in selling and marketing expenses and general and administrative expenses as a result of our business growth. Research and development expenses . Research and development expenses were HK$1,493.6 million (US$192.3 million), an increase of 3.7% from HK$1,440.9 million in 2023.
Short-term Borrowings ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ 2021 ​ 2022 ​ 2023 ​ HK$ HK$ HK$ US$ ​ (in million) Borrowings from banks (1) : 6,357 2,481 5,652 724 Note: (1) We have unused borrowing facilities of HK$14,695.1 million, HK$19,989.1 million and HK$17,400.1 million (US$2,227.7 million) from banks as of December 31, 2021, 2022 and 2023,of which nil, nil and HK$586.2 million are committed, and the remaining are uncommitted, respectively.
Short-term Borrowings ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ 2022 ​ 2023 ​ 2024 ​ HK$ HK$ HK$ US$ ​ (in million) Borrowings from banks (1) : 2,481 5,652 5,702 734 Note: (1) We have unused borrowing facilities of HK$20.0 billion, HK$17.4 billion and HK$18.2 billion (US$2.3 billion) from banks as of December 31, 2022, 2023 and 2024, of which nil, HK$586.2 million and HK$582.2 million (US$75.0 million) are committed, and the remaining are uncommitted, respectively.
Brokerage commission and handling charge income was HK$4,007.6 million in 2022, an increase of 2.4% from HK$3,913.0 million in 2021. The increase was mainly due to higher blended commission rate, partially offset by lower trading volume. The blended commission rate increased from 6.4bps in 2021 to 8.3 bps in 2022.
Brokerage commission and handling charge income. Brokerage commission and handling charge income HK$6,044.7 million (US$778.2 million), an increase of 53.2% from HK$3,944.8 million in 2023. The increase was mainly due to an increase in trading volume, partially offset by lower blended commission rate. The blended commission rate decreased from 9.3 bps in 2023 to 7.8 bps in 2024.
Cash Flows The following table sets forth a summary of our cash flows for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ HK$ HK$ HK$ US$ ​ (in thousands) Summary Consolidated Cash Flow Data: ​ ​ Net cash generated from/ (used in) operating activities 6,011,971 3,474,931 (6,337,396) (811,352) Net cash (used in)/ generated from investing activities (963,565) 93,859 (2,444,418) (312,949) Net cash generated from/(used in) financing activities 10,554,218 (7,009,521) 2,307,957 295,478 Effect of exchange rate changes on cash, cash equivalents and restricted cash 167,130 (135,196) 66,352 8,495 Net increase/(decrease) in cash, cash equivalents and restricted cash 15,769,754 (3,575,927) (6,407,505) (820,328) Cash, cash equivalents and restricted cash at beginning of the year 43,521,758 59,291,512 55,715,585 7,133,055 Cash, cash equivalents and restricted cash at end of the year 59,291,512 55,715,585 49,308,080 6,312,727 ​ 184 Table of Contents Operating activities Net cash used in operating activities in 2023 was HK$6.3 billion (US$811.4 million), as compared to net income of HK$4.3 billion (US$547.8 million) in the same year.
Cash Flows The following table sets forth a summary of our cash flows for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ HK$ HK$ HK$ US$ ​ (in thousands) Summary Consolidated Cash Flow Data: ​ ​ Net cash generated from/(used in) operating activities 3,474,931 (6,337,396) 30,996,323 3,990,410 Net cash generated from/(used in) investing activities 93,859 (2,444,418) 103,932 13,380 Net cash (used in)/(generated from) financing activities (7,009,521) 2,307,957 70,851 9,121 Effect of exchange rate changes on cash, cash equivalents and restricted cash (135,196) 66,352 (149,866) (19,293) Net (decrease)/increase in cash, cash equivalents and restricted cash (3,575,927) (6,407,505) 31,021,240 3,993,618 Cash, cash equivalents and restricted cash at beginning of the year 59,291,512 55,715,585 49,308,080 6,347,837 Cash, cash equivalents and restricted cash at end of the year 55,715,585 49,308,080 80,329,320 10,341,455 ​ 184 Table of Contents Operating activities Net cash generated from operating activities in 2024 was HK$31.0 billion (US$4.0 billion), as compared to net income of HK$5.4 billion (US$0.7 billion) in the same year.
The decrease in accounts payable to clients and brokers was mainly attributable to the decline in our clients' cash deposits. The principal non-cash items affecting the difference between our net income and our net cash used in operating activities in 2023 were HK$290.8 million (US$37.2 million) in share-based compensation expenses and HK$110.4 million (US$14.1 million) in amortization of right-of-use assets.
The principal non-cash items affecting the difference between our net income and our net cash used in operating activities in 2023 were HK$290.8 million in share-based compensation expenses and HK$110.4 million in amortization of right-of-use assets. Net cash generated from operating activities in 2022 was HK$3.5 billion, as compared to net income of HK$2.9 billion in the same year.
The PRC government may at its discretion restrict access to foreign currencies for current account transactions in the future. 183 Table of Contents Regulatory Capital Requirements Our principal broker-dealer subsidiaries, Futu Securities International (Hong Kong) Limited, Moomoo Financial Inc., Futu Clearing Inc. and Moomoo Financial Singapore Pte. Ltd. are subject to capital requirements determined by their respective regulators.
Regulatory Capital Requirements Our principal broker-dealer subsidiaries, Futu Securities International (Hong Kong) Limited, Moomoo Financial Inc., Futu Clearing Inc. and Moomoo Financial Singapore Pte. Ltd. are subject to capital requirements determined by their respective regulators.
Significant judgment is applied in determining the appropriate probability of default (“PD”) and loss given default (“LGD”), using a variety of factors such as the stock price and price volatility of the collateral. The estimation of PD and LGD further incorporates forward looking information through the use of macroeconomic scenario.
Significant judgment is applied in determining the appropriate probability of default (“PD”) and loss given default (“LGD”), using a variety of factors such as the stock price and price volatility of the collateral. The determination of LGD also involves significant judgment in considering the expected duration to foreclose the collateral.
The decrease in our trading volume from HK$4.9 trillion in 2022 to HK$4.2 trillion (US$0.5 trillion) in 2023 was primarily due to weak market sentiments. Interest income . Interest income was HK$5,536.4 million (US$708.8 million) in 2023, an increase of 72.2% from HK$3,214.3 million in 2022.
The decrease in our trading volume from HK$4.9 trillion in 2022 to HK$4.2 trillion in 2023 was primarily due to weak market sentiments.
We believe that our comprehensive offering of financial products and services and our strong technology capability in developing new products and services will allow us to capture new market opportunities.
As of the date of this annual report, we launched moomoo , the international version of Futubull , in the United States, Singapore, Australia, Japan, Malaysia and Canada. We believe that our comprehensive offering of financial products and services and our strong technology capability in developing new products and services will allow us to capture new market opportunities.
This was attributable to lower trading volume and cost savings from our U.S. self-clearing business. Interest expenses . Interest expenses were HK$910.8 million (US$116.6 million) in 2023, an increase of 211.4% from HK$292.5 million in 2022.
Brokerage commission and handling charge expenses . Brokerage commission and handling charge expenses were HK$249.6 million in 2023, a decrease of 24.3% from HK$329.8 million in 2022. This was attributable to lower trading volume and cost savings from our U.S. self-clearing business. 181 Table of Contents Interest expenses .
The difference was primarily due to net increases of HK$16.1 billion in accounts payable to clients and brokers, partially offset by net increase of HK$1.8 billion in accounts receivable from clients and brokers and net increase of HK$10.8 billion in loans and advances.
The difference was primarily due to net increase in loans and advances of HK$17.2 billion (US$2.2 billion), net increase in accounts receivable from clients and brokers of HK$12.3 billion (US$1.6 billion), offset by net increase in accounts payable to clients and brokers of HK$51.7 billion (US$6.7 billion) and net increase in securities sold under agreements to repurchase of HK$2.6 billion (US$0.3 billion).
We do not have any variable interest in any unconsolidated entity that provides liquidity, capital resources, market risk support or credit support to us or engages in leasing, hedging or product development services with us.
We do not have any variable interest in any unconsolidated entity that provides liquidity, capital resources, market risk support or credit support to us or engages in leasing, hedging or product development services with us. 187 Table of Contents Share Repurchase Program In November 2021, our board of directors approved a share repurchase program to repurchase up to US$300 million worth of ADSs until December 31, 2022.
The difference was primarily due to net increase in loans and advances of HK$5.9 billion (US$749.3 million) and net decrease in accounts payable to clients and brokers of HK$4.6 billion (US$590.7 million). The increase in loans and advances was due to the expansion of our margin financing business.
Net cash used in operating activities in 2023 was HK$6.3 billion, as compared to net income of HK$4.3 billion in the same year. The difference was primarily due to net increase in loans and advances of HK$5.9 billion and net decrease in accounts payable to clients and brokers of HK$4.6 billion.
Operating Lease Commitments The following table sets forth our operating lease commitments as of December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payment due by December 31, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total 2024 2025 2026 2027 ​ ​ (HK$ in thousands) Operating lease commitments (1) ​ 248,114 116,684 104,637 24,745 2,048 Note: (1) Operating lease commitments consist of the commitments under the lease agreements for our office premises.
Operating Lease Commitments The following table sets forth our operating lease commitments as of December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payment due by December 31, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total 2025 2026 2027 2028 2029 ​ Thereafter ​ ​ (HK$ in thousands) Operating lease commitments (1) ​ 295,979 151,192 74,025 28,633 6,643 6,750 ​ 28,736 Note: (1) Operating lease commitments consist of the commitments under the lease agreements for our office premises.
Share Repurchase Program In November 2021, our board of directors approved a share repurchase program to repurchase up to US$300 million worth of ADSs until December 31, 2022. As of December 31, 2022, we had repurchased US$300 million worth of ADSs in open market transactions in accordance with the authorization under this share repurchase program.
As of December 31, 2023, we have repurchased US$364.8 million worth of ADSs in open market transactions in accordance with the authorization under this share repurchase program. The share repurchase program expired on December 31, 2023.
For additional information on the share repurchases, see “Part II—Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers.” In March 2024, our board of directors authorized a new share repurchase program under which our company may repurchase up to US$500 million worth of ADSs, until December 31, 2025.
In March 2024, our board of directors authorized a new share repurchase program under which our company may repurchase up to US$500 million worth of ADSs, until December 31, 2025. We will fund the repurchases from our existing cash balance.
Our cash and cash equivalents primarily consist of cash on hand, demand deposits and time deposits with initial terms of less than three months placed with banks or other financial institutions, which are unrestricted for withdrawal or use, and which have original maturities of three months or less. 182 Table of Contents We believe that our current cash and cash equivalents and our anticipated cash flows from operations will be sufficient to meet our anticipated working capital requirements and material cash requirements for at least the next 12 months.
Our cash and cash equivalents primarily consist of demand deposits and time deposits with initial terms of less than three months placed with banks or other financial institutions, which are unrestricted for withdrawal or use, and which have original maturities of three months or less.
The following table sets forth our loans and advances as of December 31, 2023: ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2022 ​ 2023 ​ ​ (HK$ in thousands) ​ ​ ​ ​ ​ Margin loans ​ 24,681,724 ​ 30,621,456 IPO loans 89,465 — Other advances (1) 1,969,774 1,971,848 Subtotal 26,740,963 32,593,304 Less: Allowance for credit losses (2) (27,840) (45,949) Total 26,713,123 32,547,355 Notes: (1) Stock-pledged loans are included in other advances as of December 31, 2022 and 2023 with a gross amount of HK$1,910.7 million and HK$1,912.6 million (US$244.9 million), respectively.
The following table sets forth our loans and advances as of December 31, 2023 and 2024, respectively: ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2023 ​ 2024 ​ ​ (in thousands) ​ ​ HK$ ​ HK$ ​ US$ Margin loans ​ 30,621,456 ​ 47,833,365 ​ 6,157,983 Other advances (1) 1,971,848 1,966,383 ​ 253,149 Subtotal 32,593,304 49,799,748 ​ 6,411,132 Less: Allowance for credit losses (2) (45,949) (85,252) ​ (10,975) Total 32,547,355 49,714,496 ​ 6,400,157 Notes: (1) Stock-pledged loans are included in other advances as of December 31, 2023 and 2024 with a gross amount of HK$1,912.6 million and HK$1,907.3 million (US$245.5 million), respectively.
Risk Factors—Risks Related to Our Operations in China—We may be treated as a resident enterprise for PRC tax purposes under the PRC Enterprise Income Tax Law, and we may therefore be subject to PRC income tax on our global income.” ​ 178 Table of Contents Results of Operations The following table sets forth a summary of our consolidated results of operations for the years presented, both in absolute amount and as a percentage of our revenues for the years presented.
Risk Factors—Risks Related to Our Operations in China—We may be treated as a resident enterprise for PRC tax purposes under the PRC Enterprise Income Tax Law, and we may therefore be subject to PRC income tax on our global income.” ​ 177 Table of Contents Pillar Two ​ The Organization of Economic Cooperation and Development has proposed a global minimum tax of 15% on a countryby- country basis (“Pillar Two”).
Income tax expense We had income tax expense of HK$414.0 million in 2022, compared to HK$375.1 million in 2021, primarily due to the 6.0% year-over-year increase in our income before income tax expense. Net income As a result of the foregoing, we had net income of HK$2,926.9 million in 2022, compared to HK$2,810.2 million in 2021. B.
Net income As a result of the foregoing, we had net income of HK$4,278.9 million in 2023, compared to HK$2,926.9 million in 2022. B.
The decrease was mainly driven by lower margin financing interest expenses, which decreased by 53.1% from HK$176.2 million in 2021 to HK$82.7 million in 2022, partially offset by the increase in interest expenses associated with our securities lending business from HK$150.7 million in 2021 to HK$209.8 million in 2022. Processing and servicing costs .
The increase was mainly driven by higher expenses associated with our securities borrowing and lending business from HK$737.8 million in 2023 to HK$1,373.7 million (US$176.8 million) in 2024, which was also in line with the expansion of securities lending business. Processing and servicing costs .
The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that would restrict our operations. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.
The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that would restrict our operations.
The principal non-cash items affecting the difference between our net income and our net cash generated from operating activities in 2021 were HK$98.9 million in share-based compensation expenses and HK$138.2 million in foreign change gains.
The principal non-cash items affecting the difference between our net income and our net cash used in operating activities in 2024 were HK$334.9 million (US$43.1 million) in share-based compensation expenses and HK$105.6 million (US$13.6 million) in amortization of right-of-use assets.
Net cash used in investing activities in 2021 was HK$963.6 million, primarily due to purchase of short-term investments of HK$1,169.7 million and the purchase of property and equipment and intangible assets of HK$70.5 million, partially offset by the maturity of term deposits of HK$300.0 million.
Investing activities Net cash generated from investing activities in 2024 was HK$103.9 million (US$13.4 million), primarily due to the proceeds from disposal of short-term investments of HK$1,509.5 million (US$194.3 million), partially offset by purchase of short-term investments of HK$796.4 million (US$102.5 million), acquisition of long-term investments of HK$440.0 million (US$56.6 million) and purchase of property and equipment and intangible assets of HK$167.5 million (US$21.6 million).
In the years ended December 31, 2021, 2022 and 2023, we did not incur any Singapore income tax as there was no estimated assessable profit that was subject to Singapore income tax. ​ 177 Table of Contents PRC Generally, our PRC subsidiaries and the Consolidated Affiliated Entities are subject to enterprise income tax on their taxable income in China at a statutory rate of 25%.
Singapore does not impose a withholding tax on dividends for resident companies. PRC Generally, our PRC subsidiaries and the Consolidated Affiliated Entities are subject to enterprise income tax on their taxable income in China at a statutory rate of 25%.
Financing activities Net cash generated from financing activities in 2023 was HK$2.3 billion (US$295.5 million), primarily attributable to proceeds of HK$79.6 billion (US$10.2 billion) from other borrowings, partially offset by repayment of other borrowings of HK$76.4 billion (US$9.8 billion).
Financing activities Net cash generated from financing activities in 2024 was HK$70.9 million (US$9.1 million), primarily attributable to the net proceeds of HK$50.7 million (US$6.5 million) from other borrowings and the proceeds from exercise of employee share options of HK$20.2 million (US$2.6 million).

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeNo amendment, suspension or termination of the 2014 Incentive Plan or amendment of any outstanding award granted pursuant to the 2014 Incentive Plan may affect, in any manner materially adverse to the participant, any rights or benefits of the participant or the obligation of our company under the applicable awards previously granted pursuant to the 2014 Incentive Plan unless agreed by the participant in writing. 2019 Share Incentive Plan In December 2018, our board of directors approved the 2019 Share Incentive Plan, or the 2019 Incentive Plan, to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of our business.
Biggest changeThe 2014 Share Incentive Plan expired on October 30, 2024 and no new grants may be made under the plan after this date. 192 Table of Contents 2019 Share Incentive Plan In December 2018, our board of directors approved the 2019 Share Incentive Plan, or the 2019 Incentive Plan, to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of our business.
A director will cease to be a director automatically if, among other things, the director (i) becomes bankrupt or makes any arrangement or composition with his creditors; (ii) dies or is found by our company to be or becomes of unsound mind; (iii) resigns his office by notice in writing to our company; or (iv) without special leave of absence from our board, is absent from meetings of our board for three consecutive meetings and our board resolves that his office be vacated. 198 Table of Contents Our officers are elected by and serve at the discretion of our board of directors.
A director will cease to be a director automatically if, among other things, the director (i) becomes bankrupt or makes any arrangement or composition with his creditors; (ii) dies or is found by our company to be or becomes of unsound mind; (iii) resigns his office by notice in writing to our company; or (iv) without special leave of absence from our board, is absent from meetings of our board for three consecutive meetings and our board resolves that his office be vacated. 196 Table of Contents Our officers are elected by and serve at the discretion of our board of directors.
Our audit committee consists of Ms. Brenda Pui Man Tam and Mr. Vic Haixiang Li. Ms. Brenda Pui Man Tam is the chairperson of our audit committee. We have determined that Ms. Brenda Pui Man Tam and Mr.
Brenda Pui Man Tam and Mr. Vic Haixiang Li. Ms. Brenda Pui Man Tam is the chairperson of our audit committee. We have determined that Ms. Brenda Pui Man Tam and Mr.
The audit committee is responsible for, among other things: ● appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; ● reviewing with the independent auditors any audit problems or difficulties and management’s response; ● discussing the annual audited financial statements with management and the independent auditors; ● reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; ● reviewing and approving all proposed related party transactions; ● meeting separately and periodically with management and the independent auditors; and ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. ​ 196 Table of Contents Compensation Committee .
The audit committee is responsible for, among other things: ● appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; ● reviewing with the independent auditors any audit problems or difficulties and management’s response; ● discussing the annual audited financial statements with management and the independent auditors; ● reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; ● reviewing and approving all proposed related party transactions; ● meeting separately and periodically with management and the independent auditors; and ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.
(4) Eligibility . We may grant awards to our employees, directors and consultants of our company. However, we may grant options that are intended to qualify as incentive share options only to our employees and employees of our parent companies and subsidiaries. 193 Table of Contents (5) Vesting Schedule .
(4) Eligibility. We may grant awards to our employees, directors and consultants of our company. However, we may grant options that are intended to qualify as incentive share options only to our employees and employees of our parent companies and subsidiaries. (5) Vesting Schedule.
These shares, however, are not included in the computation of the percentage ownership of any other person. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares Beneficially Owned ​ Class A Ordinary Class B % of Total % of Aggregate ​ ​ Shares ​ Ordinary Shares ​ Ordinary Shares ​ Voting Power*** Directors and Executive Officers**: ​ ​ ​ ​ ​ ​ ​ ​ ​ Leaf Hua Li (1) 164,086,568 239,750,000 36.6 % 63.1 % Arthur Yu Chen (2) * — * * ​ Nineway Jie Zhang * — * * ​ Shan Lu (3) * — * * ​ Robin Li Xu (4) * — * * ​ Vic Haixiang Li (5) — — — — ​ Brenda Pui Man Tam (6) — — — — ​ All Directors and Executive Officers as a Group 173,331,192 239,750,000 37.4 % 63.2 % Principal Shareholders: ​ ​ ​ ​ ​ Leaf Hua Li (1) 164,086,568 239,750,000 36.6 % 63.1 % Entities affiliated with Tencent (7) 131,616,611 115,802,051 22.4 % 31.1 % * Less than 1% of our total outstanding ordinary shares. ** Except as indicated otherwise below, the business address of our directors and executive officers is 28/F, Unit 1, Building D, Kexing Science Park, 15 Keyuan Road, Technology Park, Nanshan District, Shenzhen, People’s Republic of China. *** For each person or group included in this column, percentage of total voting power represents voting power based on both Class A and Class B ordinary shares held by such person or group with respect to all outstanding shares of our Class A and Class B ordinary shares as a single class.
These shares, however, are not included in the computation of the percentage ownership of any other person. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares Beneficially Owned ​ Class A Ordinary Class B % of Total % of Aggregate ​ ​ Shares ​ Ordinary Shares ​ Ordinary Shares ​ Voting Power*** Directors and Executive Officers**: ​ ​ ​ ​ ​ ​ ​ ​ ​ Leaf Hua Li (1) 164,086,568 239,750,000 36.3 % 63.0 % Arthur Yu Chen (2) * — * * ​ Nineway Jie Zhang * — * * ​ Shan Lu (3) * — * * ​ Robin Li Xu (4) * — * * ​ Vic Haixiang Li (5) — — — — ​ Brenda Pui Man Tam (6) — — — — ​ All Directors and Executive Officers as a Group 173,169,800 239,750,000 37.1 % 63.1 % Principal Shareholders: ​ ​ ​ ​ ​ Leaf Hua Li (1) 164,086,568 239,750,000 36.3 % 63.0 % Entities affiliated with Tencent (7) 110,971,451 115,802,051 20.4 % 30.8 % * Less than 1% of our total outstanding ordinary shares. ** Except as indicated otherwise below, the business address of our directors and executive officers is 28/F, Unit 1, Building D, Kexing Science Park, 15 Keyuan Road, Technology Park, Nanshan District, Shenzhen, People’s Republic of China. 198 Table of Contents *** For each person or group included in this column, percentage of total voting power represents voting power based on both Class A and Class B ordinary shares held by such person or group with respect to all outstanding shares of our Class A and Class B ordinary shares as a single class.
Committees of the Board of Directors We have established three committees under the board of directors: an audit committee, a compensation committee and a nominating and corporate governance committee. We have adopted a charter for each of the three committees. Each committee’s members and functions are described below. ​ 195 Table of Contents Audit Committee .
Committees of the Board of Directors We have established three committees under the board of directors: an audit committee, a compensation committee and a nominating and corporate governance committee. We have adopted a charter for each of the three committees. Each committee’s members and functions are described below. 194 Table of Contents Audit Committee. Our audit committee consists of Ms.
(7) Represents (i) 115,802,051 Class B ordinary shares and 53,840,949 Class A ordinary shares held of record by Huang River Investment Limited, a wholly-owned subsidiary of Tencent Holdings Limited; (ii) 71,024,142 Class A ordinary shares held of record by Image Frame Investment (HK) Limited, a wholly-owned subsidiary of Tencent Holdings Limited; (iii) 1,161,840 Class A ordinary shares represented by 145,230 ADSs held of record by TPP Opportunity GP I, Ltd., an entity controlled by Tencent Holdings Limited; (iv) 5,412,888 Class A ordinary shares represented by 676,611 ADSs held of record by Tencent Mobility Limited, a wholly-owned subsidiary of Tencent Holdings Limited; and (v) 176,792 Class A ordinary shares represented by 22,099 ADSs held of record by Distribution Pool Limited, a wholly-owned subsidiary of Tencent Holdings Limited, as reported on the Schedule 13G/A filed by Huang River Investment Limited, among others, on February 2, 2024.
(7) Represents (i) 115,802,051 Class B ordinary shares and 33,195,789 Class A ordinary shares held of record by Huang River Investment Limited, a wholly-owned subsidiary of Tencent Holdings Limited; (ii) 71,024,142 Class A ordinary shares held of record by Image Frame Investment (HK) Limited, a wholly-owned subsidiary of Tencent Holdings Limited; (iii) 1,161,840 Class A ordinary shares represented by 145,230 ADSs held of record by TPP Opportunity GP I, Ltd., an entity controlled by Tencent Holdings Limited; (iv) 5,412,888 Class A ordinary shares represented by 676,611 ADSs held of record by Tencent Mobility Limited, a wholly-owned subsidiary of Tencent Holdings Limited; and (v) 176,792 Class A ordinary shares represented by 22,099 ADSs held of record by Distribution Pool Limited, a wholly-owned subsidiary of Tencent Holdings Limited, as reported on the Schedule 13G/A jointly filed by Huang River Investment Limited, Image Frame Investment (HK) Limited, and Tencent Holdings Limited on November 14, 2024.
Arthur Yu Chen has served as our chief financial officer since September 2017 and is responsible for the accounting, finance and internal controls functions, and the capital markets activities of our Group. Prior to joining our company, Mr.
Arthur Yu Chen has served as our chief financial officer since September 2017 and is responsible for the accounting, finance and internal controls functions, and the capital markets activities of our Group. Since March 2025, Mr. Chen has served as a non - executive director of Airstar Bank. Prior to joining our company, Mr.
To our knowledge, as of the Latest Practicable Date, a total of 572,111,688 Class A ordinary shares are held by one record holder in the United States, representing approximately 51.9% of our total outstanding shares. The holder is The Bank of New York Mellon, the depositary of the ADS program.
To our knowledge, as of the Latest Practicable Date, a total of 604,048,032 Class A ordinary shares are held by one record holder in the United States, representing approximately 54.2% of our total outstanding shares. The holder is The Bank of New York Mellon, the depositary of the ADS program.
It was previously considered that a director need not exhibit in the performance of his or her duties a greater degree of skill than may reasonably be expected from a person of his or her knowledge and experience.
Our directors also owe to our company a duty to act with skill and care. It was previously considered that a director need not exhibit in the performance of his or her duties a greater degree of skill than may reasonably be expected from a person of his or her knowledge and experience.
The nominating and corporate governance committee is responsible for, among other things: ● selecting and recommending to the board nominees for election by the shareholders or appointment by the board; ● reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience and diversity; ● making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and ● advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken. 197 Table of Contents Duties of Directors Under Cayman Islands law, our directors owe fiduciary duties to our company, including a duty of loyalty, a duty to act honestly, and a duty to act in what they consider in good faith to be in our best interests.
The nominating and corporate governance committee is responsible for, among other things: ● selecting and recommending to the board nominees for election by the shareholders or appointment by the board; 195 Table of Contents ● reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience and diversity; ● making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and ● advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken.
The following table summarizes, as of the Latest Practicable Date, the number of Class A ordinary shares underlying outstanding options, restricted share units and other equity awards that we granted to our directors and executive officers. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares ​ ​ ​ ​ ​ Underlying ​ ​ ​ ​ ​ ​ ​ ​ Equity Awards ​ Exercise Price ​ ​ ​ ​ Name ​ Granted ​ (US$/Share) ​ Date of Grant ​ Date of Expiration Leaf Hua Li *(1)(2) ​ — December 24, 2020 December 23, 2030 Arthur Yu Chen ​ *(1) ​ Nominal November 8, 2018, October 5, 2020, December 16, 2021, December 30, 2022, December 24, 2023 November 7, 2023, October 4, 2030, December 15, 2031, December 29, 2032, December 23, 2033 Robin Li Xu *(1) ​ Nominal January 2, 2020, December 30, 2022, December 24, 2023 January 1, 2030, December 29, 2032, December 23, 2033 Notes: (1) “*” denotes less than 1% of our total outstanding ordinary shares.
As of the Latest Practicable Date, 1,959,506 share options and 19,291,480 restricted share units have been granted and were outstanding under the 2014 Incentive Plan and the 2019 Incentive Plan, excluding awards that were exercised, settled, forfeited or cancelled after the relevant grant dates. 193 Table of Contents The following table summarizes, as of the Latest Practicable Date, the number of Class A ordinary shares underlying outstanding options, restricted share units and other equity awards that we granted to our directors and executive officers. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares ​ ​ ​ ​ ​ Underlying ​ ​ ​ ​ ​ ​ ​ ​ Equity Awards ​ Exercise Price ​ ​ ​ ​ Name ​ Granted ​ (US$/Share) ​ Date of Grant ​ Date of Expiration Leaf Hua Li *(1)(2) ​ — December 24, 2020 December 23, 2030 Arthur Yu Chen ​ *(1) ​ Nominal October 5, 2020, December 16, 2021, December 30, 2022, December 24, 2023 October 4, 2030, December 15, 2031, December 29, 2032, December 23, 2033 Robin Li Xu *(1) ​ Nominal January 2, 2020, December 30, 2022, December 24, 2023 January 1, 2030, December 29, 2032, December 23, 2033 Notes: (1) “*” denotes less than 1% of our total outstanding ordinary shares.
Compensation Compensation of Directors and Executive Officers For the fiscal year ended December 31, 2023, we paid an aggregate of HK$36.5 million (US$4.7 million) in cash to our executive officers and directors, and an aggregate of HK$350.0 thousands (US$44.8 thousands) in cash to our non-executive directors.
Compensation Compensation of Directors and Executive Officers For the fiscal year ended December 31, 2024, we paid an aggregate of HK$60.5 million (US$7.8 million) in cash to our executive officers and directors, and an aggregate of HK$350 thousand (US$45.1 thousand) in cash to our non-executive directors.
In accordance with Canadian employment laws, we are obligated to contribute a specified percentage of wages, bonuses, and certain allowances to employee benefit plans. The contribution percentage is set within the limits defined by provincial and federal regulations.
In accordance with Canadian employment laws, we are obligated to contribute a specified percentage of wages, bonuses, and certain allowances to employee benefit plans. The contribution percentage is set within the limits defined by provincial and federal regulations. All employees are eligible for relevant non-salary benefits. Additionally, we provide team-building budget benefits for each department.
As of the date of this annual report, the maximum aggregate number of Class A ordinary shares which may be issued pursuant to all awards under the 2014 Incentive Plan is 135,032,132. The following paragraphs describe the principal terms of the 2014 Incentive Plan: (1) Types of awards.
The maximum aggregate number of Class A ordinary shares which may be issued pursuant to all awards under the 2014 Incentive Plan is 135,032,132.
Share Ownership Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our ordinary shares as of the Latest Practicable Date by: ● each of our directors and executive officers; and ● each person known to us to own beneficially 5% or more of our ordinary shares. 200 Table of Contents The calculations in the table below are based on 747,830,786 Class A ordinary shares and 355,552,051 Class B ordinary shares outstanding as of the Latest Practicable Date.
Share Ownership Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our ordinary shares as of the Latest Practicable Date by: ● each of our directors and executive officers; and ● each person known to us to own beneficially 5% or more of our ordinary shares.
He was recognized as “China Top CIO” by the CEO and CIO magazine in 2008. Ms. Brenda Pui Man Tam has served as our independent director since March 2019 and is responsible for providing professional opinion and advice to our board of directors. Ms.
Brenda Pui Man Tam has served as our independent director since March 2019 and is responsible for providing professional opinion and advice to our board of directors. Ms.
Our compensation committee consists of Mr. Vic Haixiang Li, Ms. Brenda Pui Man Tam and Mr. Leaf Hua Li. Mr. Vic Haixiang Li is the chairman of our compensation committee. We have determined that Mr. Vic Haixiang Li and Ms. Brenda Pui Man Tam each satisfies the “independence” requirements of Rule 5605(a)(2) of the Nasdaq Stock Market Rules.
Compensation Committee . Our compensation committee consists of Mr. Vic Haixiang Li, Ms. Brenda Pui Man Tam and Mr. Leaf Hua Li. Mr. Vic Haixiang Li is the chairman of our compensation committee. We have determined that Mr. Vic Haixiang Li and Ms.
The following table sets forth the number of our employees as of December 31, 2023 by function: ​ ​ ​ ​ ​ ​ ​ ​ As of ​ ​ December 31, 2023 ​ ​ Number ​ % Functions: ​ ​ Research and development 2,047 63.7 ​ Customer services and operations 392 12.2 ​ General and administration 434 13.5 ​ Marketing 340 10.6 ​ Total 3,213 100.0 ​ ​ 199 Table of Contents We participate in various employee social security plans that are organized by municipal and provincial governments, including housing, pension, medical insurance and unemployment insurance, as required by laws and regulations in the PRC.
The following table sets forth the number of our employees as of December 31, 2024 by function: ​ ​ ​ ​ ​ ​ ​ As of ​ ​ December 31, 2024 ​ Number % Functions: ​ ​ Research and development 1,986 59.4 Customer services and operations 423 12.7 General and administration 558 16.7 Marketing 376 11.2 Total 3,343 100.0 ​ We participate in various employee social security plans that are organized by municipal and provincial governments, including housing, pension, medical insurance and unemployment insurance, as required by laws and regulations in each region.
Employees We had a total of 2,318, 2,784 and 3,213 employees as of December 31, 2021, 2022 and 2023, respectively. As of December 31, 2023, 2,671 employees were located in Mainland China, 210 employees were located in Hong Kong, 113 employees were located in the United States, 85 employees were located in Singapore, and 134 employees were located elsewhere.
D. Employees We had a total of 2,784, 3,213 and 3,343 employees as of December 31, 2022, 2023 and 2024, respectively. As of December 31, 2024, 2,601 employees were located in Mainland China, 267 employees were located in Hong Kong, 123 employees were located in the United States, 104 employees were located in Singapore, and 248 employees were located elsewhere.
(2) In December 2020, our company granted Mr. Li restricted share units under the 2019 Incentive Plan to acquire 800 Class A ordinary shares for the purpose of testing and experiencing our self-developed ESOP management system. ​ 194 Table of Contents Equity Incentive Trust FUTU First Trust was established under a deed of declaration by Vistra Trust (Singapore) Pte.
(2) In December 2020, our company granted Mr. Li restricted share units under the 2019 Incentive Plan to acquire 800 Class A ordinary shares for the purpose of testing and experiencing our self-developed ESOP management system. C. Board Practices Board of Directors Our board of directors consists of five directors.
The registered address of each of Lera Ultimate Limited and Lera Infinity Limited is Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands. (2) The business address of Mr.
The registered address of each of Lera Ultimate Limited and Lera Infinity Limited is Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands. (2) The business address of Mr. Arthur Yu Chen is 34/F, United Centre, 95 Queensway, Admiralty, Hong Kong S.A.R., People’s Republic of China. (3) The business address of Mr.
None of our outstanding Class B ordinary shares are held by record holders in the United States.
None of our outstanding Class B ordinary shares are held by record holders in the United States. The number of beneficial owners of the ADSs in the United States is likely to be much larger than the number of record holders of our ordinary shares in the United States.
The compensation committee assists the board of directors in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers. Our chief executive officer may not be present at any committee meeting during which his compensation is deliberated.
Our chief executive officer may not be present at any committee meeting during which his compensation is deliberated.
Robin Li Xu is 1 Raffles Quay, #39-02, North Tower, Singapore. (5) The business address of Mr. Vic Haixiang Li is Suite 7013, 70/F, Two International Finance Centre, 8 Finance Street, Central, Hong Kong S.A.R., People’s Republic of China. (6) The business address of Ms.
Vic Haixiang Li is Suite 7013, 70/F, Two International Finance Centre, 8 Finance Street, Central, Hong Kong S.A.R., People’s Republic of China. (6) The business address of Ms. Brenda Pui Man Tam is 932 Weldwood Ct, Los Gatos, CA 95032, the United States of America.
Vic Li is one of the founders and a former senior executive vice president of Tencent. Mr. Li received his bachelor’s degree in computer software from South China University of Technology in July 1994 and his master’s degree in business administration from China Europe International Business School in September 2017.
Li received his bachelor’s degree in computer software from South China University of Technology in July 1994 and his master’s degree in business administration from China Europe International Business School in September 2017. He was recognized as “China Top CIO” by the CEO and CIO magazine in 2008. Ms.
The number of beneficial owners of the ADSs in the United States is likely to be much larger than the number of record holders of our ordinary shares in the United States. ​ To our knowledge, except as disclosed above, we are not owned or controlled, directly or indirectly, by another corporation, by any foreign government or by any other natural or legal person or persons, severally or jointly.
To our knowledge, except as disclosed above, we are not owned or controlled, directly or indirectly, by another corporation, by any foreign government or by any other natural or legal person or persons, severally or jointly. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. F.
Our directors must also exercise their powers only for a proper purpose. Our directors also owe to our company a duty to act with skill and care.
Duties of Directors Under Cayman Islands law, our directors owe fiduciary duties to our company, including a duty of loyalty, a duty to act honestly, and a duty to act in what they consider in good faith to be in our best interests. Our directors must also exercise their powers only for a proper purpose.
We also have a systematic performance evaluation system which provides the basis for human resource decisions such as remuneration adjustments, career promotion and talent cultivation. We enter into standard labor contracts with our employees. We also enter into standard confidentiality and non-compete agreements with our senior management.
We enter into standard labor contracts with our employees. We also enter into standard confidentiality and non-compete agreements with our senior management.
We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. ​ F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation ​ Not applicable. ​
Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation 199 Table of Contents ​ Not applicable. ​
Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
The calculations in the table below are based on 758,267,970 Class A ordinary shares and 355,552,051 Class B ordinary shares outstanding as of the Latest Practicable Date. Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
Removed
The 2014 Incentive Plan permits the awards of options approved by the plan administrator. (2) Plan administration . Our board of directors or a committee of one or more members appointed by our board of directors or another committee within its delegated authority by our board of directors will administer the 2014 Incentive Plan.
Added
Vic Li is one of the founders and a former senior executive vice president of Tencent. Mr. Li was appointed as a non - executive director of IceCure Medical Ltd (Nasdaq: ICCM) effective on December 23, 2024. Mr.
Removed
Subject to the terms of the 2014 Incentive Plan and in the case of the committee, the specific duties delegated by our board of directors to the committee, the plan administrator has the authority to determine the participants to receive awards, the type and number of awards to be granted to each participant, and the terms and conditions of each award, among others.
Added
Brenda Pui Man Tam each satisfies the “independence” requirements of Rule 5605(a)(2) of the Nasdaq Stock Market Rules. The compensation committee assists the board of directors in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers.
Removed
Awards granted under the 2014 Incentive Plan are evidenced by an award agreement that sets forth terms, conditions and limitations for each award, which may include the term of the award, the provisions applicable in the event that the grantee’s employment or service terminates, and our authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind the award. 192 Table of Contents (4) Eligibility .
Added
The team-building budget is the activity fund allocated by us to each department and can be used to organize inter-departmental activities, internal department activities, as well as welcome and farewell events for employees. We also have a systematic performance evaluation system which provides the basis for human resource decisions such as remuneration adjustments, career promotion and talent cultivation.
Removed
We may grant awards to, among others, our officers, employees, directors and consultants of our company. (5) Vesting schedule . In general, the plan administrator determines the vesting schedule, which is specified in the relevant award agreement. (6) Exercise of options . The plan administrator determines the exercise price for each award, which is stated in the award agreement.
Added
We continue to strengthen talent management and development, regularly conduct performance management activities that cover core aspects such as performance goal setting, performance coaching, and review evaluation. The goal-setting mechanism further reinforces goal orientation, ensuring that employees’ work priorities align with our business development needs through regular tracking and adjustments.
Removed
The vested portion of option will expire if not exercised prior to the time as the plan administrator determines at the time of its grant. However, the maximum exercisable term is ten years from the date of a grant. (7) Transfer restrictions .
Added
The performance evaluation system provides employees with timely and objective feedback, helping them identify strengths and areas for improvement. This performance management activities in 2024 have covered approximately 95% of our employees.
Removed
Awards may not be transferred in any manner by the participant other than in accordance with the exceptions provided in the 2014 Incentive Plan, such as transfers by will or the laws of descent and distribution, or as provided in the relevant award agreement or otherwise determined by the plan administrator.
Added
We will continue to optimize the performance management system, further enhancing employee engagement and management efficiency, providing a solid talent guarantee for our long-term sustainable development. 197 Table of Contents We have always adhered to sharing performance results with our employees.
Removed
(8) Termination and amendment of the 2014 Incentive Plan . Unless terminated earlier, the 2014 Incentive Plan has a term of ten years. Our board of directors has the authority to terminate, amend or modify the plan.
Added
At the end of each year, based on our overall business performance, we also provide annual performance bonuses to non-executive and non-sales employees based on the achievement of our performance expectations and individual performance assessments.
Removed
As of the Latest Practicable Date, 6,186,058 share options and 26,915,784 restricted share units have been granted and were outstanding under the 2014 Incentive Plan and the 2019 Incentive Plan, excluding awards that were forfeited or cancelled after the relevant grant dates.
Added
To promote the joint growth of employees and our company, we offer an ESOP incentive plan to key employees, critical position talents, and managers at all levels, provided they meet certain tenure conditions. The implementation of the plan aims to enhance employees’ sense of belonging and promote the long-term sustainable development of our company and personal growth.
Removed
Limited, or Vistra Trust, as trustee, dated November 30, 2018. Through FUTU First Trust, our Class A ordinary shares and other rights and interests under awards granted pursuant to our 2014 Incentive Plan may be provided to certain grant recipients.
Added
Shan Lu is Gemdale Viseen Tower, No. 16, Gaoxinnanshi Road, Nanshan District, Shenzhen, People’s Republic of China. (4) The business address of Mr. Robin Li Xu is 1 Raffles Quay, #39-02, North Tower, Singapore. (5) The business address of Mr.
Removed
As of the date of this annual report, some of our grantees under the 2014 Incentive Plan, all of which are our employees, participated in the FUTU First Trust. Participants in FUTU First Trust transfer their equity awards to Vistra Trust to be held for their benefit.
Removed
Upon satisfaction of vesting conditions and request by grant recipients, Vistra Trust will exercise the equity awards and transfer the relevant Class A ordinary shares and other rights and interest under the equity awards to the underlying grant participants upon the written direction of the trust administrator.
Removed
The deed provides that Vistra Trust shall not exercise the voting rights attached to such Class A ordinary shares unless otherwise directed by the trust administrator, which is an advisory committee consisting of authorized representatives of our company. C. Board Practices Board of Directors Our board of directors consists of five directors.
Removed
Board Diversity ​ ​ ​ ​ ​ ​ ​ ​ ​ Board Diversity Matrix (As of the Latest Practicable Date) ​ Country of Principal Executive Offices: Hong Kong S.A.R., People’s Republic of China Foreign Private Issuer Yes Disclosure Prohibited Under Home Country Law No Total Number of Directors 5 ​ Female Male Non-Binary Did Not Disclose Gender Part I: Gender Identity Directors 1 4 — — Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction — LGBTQ+ — Did Not Disclose Demographic Background — ​ D.
Removed
Arthur Yu Chen is 34/F, United Centre, 95 Queensway, Admiralty, Hong Kong S.A.R., People’s Republic of China. 201 Table of Contents (3) The business address of Mr. Shan Lu is Building A, No.12, Shenzhenwan Science and Technology Ecological Garden, Yuehai Subdistrict, Nanshan District, Shenzhen, People’s Republic of China. (4) The business address of Mr.
Removed
Brenda Pui Man Tam is 932 Weldwood Ct, Los Gatos, CA 95032, the United States of America.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

3 edited+2 added−0 removed2 unchanged
Biggest changeAs of December 31, 2023, we had amounts due to Tencent of HK$69.0 million (US$8.8 million), primarily consisting of amounts due to Tencent of HK$55.9 million (US$7.2 million) in relation to purchase of cloud equipment and services. Transactions with Directors and Executive Officers We provide brokerage services to our directors and officers and their spouses.
Biggest changeAs of December 31, 2024, we had amounts due from Airstar Bank of HK$61.2 million (US$7.9 million), primarily consisting of the receivable of technology service income. Transactions with Directors and Executive Officers We provide brokerage services to our directors and officers and their spouses.
Revenue earned from such services amounted to HK$0.1 million (US$0.01 million) for the year ended December 31, 2023. Cash deposited by our directors, officers and their spouses for trading purpose were recorded as payables to clients in our consolidated balance sheets and amounted to HK$31.5 million (US$4.0 million) as of December 31, 2023.
Revenue earned from such services amounted to HK$88.1 thousand (US$11.3 thousand) for the year ended December 31, 2024. Cash deposited by our directors, officers and their spouses for trading purpose were recorded as payables to clients in our consolidated balance sheets and amounted to HK$26.7 million (US$3.4 million) as of December 31, 2024.
Organizational Structure—Contractual Arrangements with the VIEs and Their Shareholders.” 202 Table of Contents Transactions with Tencent Tencent has been a principal shareholder of us since October 2014. We purchased software, cloud services, SMS channel services and other services from Tencent in the amount of HK$158.9 million (US$20.3 million) in 2023.
Organizational Structure—Contractual Arrangements with the VIEs and Their Shareholders.” Transactions with Tencent Tencent has been a principal shareholder of us since October 2014. We purchased software, cloud services, SMS channel services and other services from Tencent in the amount of HK$172.3 million (US$22.2 million) in 2024.
Added
As of December 31, 2024, we had amounts due to Tencent of HK$79.1 million (US$10.2 million), primarily consisting of the payable of HK$62.4 million (US$8.0 million) in relation to purchase of cloud equipment and services. Transactions with Airstar Bank Airstar Bank is a wholly owned subsidiary of Gravitation Fintech HK Limited.
Added
We have significant influence over Airstar Bank indirectly through our equity method investment in Gravitation Fintech HK Limited, which became an associate of our Group in May 2024. We earned technology service income from Airstar Bank in the amount of HK$61.0 million (US$7.9 million) in 2024.

Other FUTU 10-K year-over-year comparisons