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What changed in UP Fintech Holding Ltd's 20-F — 2022 vs 2023

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Paragraph-level year-over-year comparison of UP Fintech Holding Ltd's 2022 and 2023 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 2023 report.

+627 added−624 removedSource: 20-F (2024-04-22) vs 20-F (2023-04-26)

Top changes in UP Fintech Holding Ltd's 2023 20-F

627 paragraphs added · 624 removed · 514 edited across 6 sections

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed1 unchanged
Biggest changeItem 2. Offer Statistics and Expected Timetable 8 Item 3. Key Information 8 Item 4. Information on the Company 79 Item 5. Operating and Financial Review and Prospects 108 Item 6. Directors, Senior Management and Employees 122 Item 7. Major Shareholders and Related Party Transactions 131 Item 8. Financial Information 134 Item 9. The Offer and Listing 134 Item 10.
Biggest changeItem 2. Offer Statistics and Expected Timetable 8 Item 3. Key Information 8 Item 4. Information on the Company 79 Item 5. Operating and Financial Review and Prospects 108 Item 6. Directors, Senior Management and Employees 123 Item 7. Major Shareholders and Related Party Transactions 132 Item 8. Financial Information 133 Item 9. The Offer and Listing 134 Item 10.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

264 edited+53 added−41 removed717 unchanged
Biggest changeSome external service providers which have assets that are important to the services they provide us are located outside the United States, and their ability to provide these services is subject to risks from unfavorable political, economic, legal or other developments, such as social or political instability, changes in governmental policies or changes in the applicable laws and regulations. 50 Table of Contents An interruption in or the cessation of service by any external service provider as a result of system failures, capacity constraints, financial constraints or problems, unanticipated trading market closures or for any other reason and our inability to make alternative arrangements in a smooth and timely manner, if at all, could have a material adverse effect on our business, results of operations and financial condition.
Biggest changeAn interruption in or the cessation of service by any external service provider as a result of system failures, capacity constraints, financial constraints or problems, unanticipated trading market closures or for any other reason and our inability to make alternative arrangements in a smooth and timely manner, if at all, could have a material adverse effect on our business, results of operations and financial condition.
All of the agreements under our contractual arrangements are governed by PRC law and provide for the resolution of disputes through arbitration in China. Accordingly, these contracts would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures.
All of the agreements under our contractual arrangements are governed by the PRC law and provide for the resolution of disputes through arbitration in China. Accordingly, these contracts would be interpreted in accordance with the PRC law and any disputes would be resolved in accordance with PRC legal procedures.
Beijing Yiyi’s subsidiary, Beijing U-Tiger Network Technology Co., LTD, holds the License for Production and Operation of Radio and TV Programs issued on June 27, 2022, and the value-added telecommunications business license issued on July 27. 2022.
Beijing Yiyi’s subsidiary, Beijing U-Tiger Network Technology Co., LTD, holds the License for Production and Operation of Radio and TV Programs issued on June 27, 2022, and the Business License for Value-added Telecommunications Business issued on July 27, 2022.
Beijing Yiyi’s subsidiary, Beijing Yixin Xiangshang Technology Co.,LTD, holds the License for Production and Operation of Radio and TV Programs issued on May 10, 2021, and the value-added telecommunications business license issued on September 4, 2019.
Beijing Yiyi’s subsidiary, Beijing Yixin Xiangshang Technology Co.,LTD, holds the License for Production and Operation of Radio and TV Programs issued on May 10, 2021, and the Business License for Value-added Telecommunications Business issued on September 4, 2019.
On December 15, 2022, the PCAOB vacated its 2021 determination that the positions taken by authorities in Chinese mainland and Hong Kong prevented it from inspecting and investigating completely registered public accounting firms headquartered in those jurisdictions.
On December 15, 2022, the PCAOB vacated its 2021 determination that the positions taken by authorities in Chinese mainland and Hong Kong prevented it from inspecting and investigating completely registered public accounting firms headquartered in those jurisdictions.
For more information, refer to the risk factor above under the heading “If the agreements that establish the structure for operating some of our activities in China do not comply with PRC regulations, or if we fail to obtain all required permissions and approvals required by Chinese regulatory authorities or if these regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.” PRC Regulations Relating to Securities and Futures Brokerage Business Under existing PRC securities laws and regulations, including Securities Law of the PRC , which was most recently amended on 28 December, 2019 and the amended Securities Law of the PRC became effective on March 1, 2020, operating securities business in the PRC, including among others, securities brokerage business, futures brokerage business, stock option brokerage business, and securities and futures investment consulting services, requires a securities brokerage license or certain other approvals from the Chinese Securities Regulatory Commission, or the CSRC.
For more information, refer to the risk factor above under the heading “If the agreements that establish the structure for operating some of our activities in China do not comply with PRC regulations, or if we fail to obtain all required permissions and approvals required by Chinese regulatory authorities or if these regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.” PRC Regulations Relating to Securities and Futures Brokerage Business Under existing PRC securities laws and regulations, including Securities Law of the PRC , which was most recently amended on 28 December, 2019 became effective on March 1, 2020, operating securities business in the PRC, including among others, securities brokerage business, futures brokerage business, stock option brokerage business, and securities and futures investment consulting services, requires a securities brokerage license or certain other approvals from the Chinese Securities Regulatory Commission, or the CSRC.
Furthermore, on December 19, 2020, the NDRC and the MOFCOM jointly issued the Measures for Security Review of Foreign Investment, effective on January 18, 2021, which provides detailed guidance regarding security review of foreign investment that has a potential impact on national security.
Furthermore, on December 19, 2020, the NDRC and the MOFCOM jointly issued the Measures for Security Review of Foreign Investment, effective on January 18, 2021, which provides detailed guidance regarding security review of foreign investment that has a potential impact on national security.
These regulations stipulate that general websites established by non-news organizations may publish news released by certain official news agencies if such websites satisfy the requirements set forth in the these regulations but may not publish news items produced by themselves or other news sources.
These regulations stipulate that general websites established by non-news organizations may publish news released by certain official news agencies if such websites satisfy the requirements set forth in these regulations but may not publish news items produced by themselves or other news sources.
Where such information and data need to be transmitted overseas based on commercial demand, a security assessment shall be conducted in accordance with the measures formulated by the national cyberspace administration authority in concert with the relevant departments under the State Council.
Where such information and data need to be transmitted overseas based on commercial demand, a security assessment shall be conducted in accordance with the measures formulated by the national cyberspace administration authority in concert with the relevant departments under the State Council.
On December 28, 2021, the CAC and other twelve PRC regulatory authorities jointly revised and promulgated the Measures for Cybersecurity Review, or the Cybersecurity Review Measures, which came into effect on February 15, 2022.
On December 28, 2021, the CAC and other twelve PRC regulatory authorities jointly revised and promulgated the Measures for Cybersecurity Review, or the Cybersecurity Review Measures, which came into effect on February 15, 2022.
Pursuant to the Cybersecurity Review Measures, besides the procurement of network products and services by critical information infrastructure operators, any data processing activities by network platform operators that affects or may affect national security shall be subject to the cybersecurity review as well.
Pursuant to the Cybersecurity Review Measures, besides the procurement of network products and services by critical information infrastructure operators, any data processing activities by network platform operators that affects or may affect national security shall be subject to the cybersecurity review as well.
In accordance with the Cybersecurity Review Measures, operators mastering personal information of more than one million users must apply to the Cybersecurity Review Office for cybersecurity review when they seek for listing in a foreign country.
In accordance with the Cybersecurity Review Measures, operators mastering personal information of more than one million users must apply to the Cybersecurity Review Office for cybersecurity review when they seek for listing in a foreign country.
Under the Several Provisions on Regulating the Market Order of Internet Information Services issued by the MIIT in December 2011 and Cyber Security Law, an Internet information service provider may not collect any user’s personal information or provide any such information to third parties without that user’s consent, and it must also expressly inform that user of the method, content and purpose of the collection and processing of such user’s personal information and may only collect such information as necessary for the provision of its services.
Under the Several Provisions on Regulating the Market Order of Internet Information Services issued by the MIIT in December 2011 and the Cyber Security Law, an Internet information service provider may not collect any user’s personal information or provide any such information to third parties without that user’s consent, and it must also expressly inform that user of the method, content and purpose of the collection and processing of such user’s personal information and may only collect such information as necessary for the provision of its services.
The Data Export Measures require that any data processor which processes or exports personal information exceeding certain volume threshold under such measures shall apply for security assessment by the CAC before transferring any personal information abroad. The security assessment requirement also applies to any transfer of important data outside of China.
The Data Export Measures require that any data processor which processes or exports personal information exceeding certain volume threshold under such measures shall apply for security assessment by the CAC before transferring any personal information abroad. The security assessment requirement also applies to any transfer of important data outside of China.
On February 17, 2023, the CSRC promulgated Trial Administrative Measures of the Overseas Securities Offering and Listing by Domestic Companies , or the Overseas Listing Trial Measures and relevant five guidelines, which became effective on March 31, 2023.
On February 17, 2023, the CSRC promulgated the Trial Administrative Measures of the Overseas Securities Offering and Listing by Domestic Companies , or the Overseas Listing Trial Measures and relevant five guidelines, which became effective on March 31, 2023.
PRC Regulations for Patent Pursuant to the Patent Law of the PRC , or Patent Law, as amended in 2008, after the grant of the patent right for an invention or utility model, except where otherwise provided for in the Patent Law, no entity or individual may, without the authorization of the patent owner, exploit the patent, that is, make, use, offer to sell, sell or import the patented product, or use the patented process, or use, offer to sell, sell or import any product which is a direct result of the use of the patented process, for production or business purposes.
PRC Regulations for Patent Pursuant to the Patent Law of the PRC , or the Patent Law, as amended in 2008, after the grant of the patent right for an invention or utility model, except where otherwise provided for in the Patent Law, no entity or individual may, without the authorization of the patent owner, exploit the patent, that is, make, use, offer to sell, sell or import the patented product, or use the patented process, or use, offer to sell, sell or import any product which is a direct result of the use of the patented process, for production or business purposes.
The businesses of securities and other financial instruments are heavily regulated. Our brokerage business is subject to regulations in the United States, Singapore, New Zealand, Australia, Hong Kong and other jurisdictions in which we offer our products and services. Major regulatory bodies include, among others, in the United States, the Financial Industry Regulatory Authority, or the FINRA, the U.S.
The businesses of securities and other financial instruments are heavily regulated. Our brokerage business is subject to regulations in the United States, Singapore, New Zealand, Australia, Hong Kong and other jurisdictions in which we offer our products and services. Major regulatory bodies include, among others, in the United States, the Financial Industry Regulatory Authority, or FINRA, the U.S.
(i) We should stop all incremental illegal operations in Chinese mainland, such as soliciting and developing any new Chinese mainland customers or opening new securities accounts for them. (ii) We should properly handle the existing accounts held by Chinese mainland investors by allowing them to continue their transactions through such accounts.
(i) We should stop all incremental illegal operations in Chinese mainland, such as soliciting and developing any new Chinese mainland customers or opening new securities accounts for them; and (ii) We should properly handle the existing accounts held by Chinese mainland investors by allowing them to continue their transactions through such accounts.
However, we are strictly prohibited from accepting any incremental funds that violate PRC foreign exchange regulations to such existing accounts.
However, we are strictly prohibited from accepting any incremental funds that violate PRC foreign exchange regulations to such existing accounts.
Stringent rules with respect to the maintenance of specific levels of net capital by securities broker-dealers or investment advisory firms have been adopted by many regulatory authorities and agencies such as the SEC, the FINRA, the U.S. Commodity Futures Trading Commission, or the CFTC, and the NFA.
Stringent rules with respect to the maintenance of specific levels of net capital by securities broker-dealers or investment advisory firms have been adopted by many regulatory authorities and agencies such as the SEC, FINRA, the U.S. Commodity Futures Trading Commission, or the CFTC, and the NFA.
As of and for the year ended December 31, 2021: Parent VIEs (1) Subsidiaries eliminating adjustments Consolidated (2) Current assets 170,220,287 51,873,657 3,234,726,520 (185,548,937 ) 3,271,271,527 Non-current assets 428,634,807 16,083,322 34,013,807 (428,584,807 ) 50,147,129 Total assets 598,855,094 67,956,979 3,268,740,327 (614,133,744 ) 3,321,418,656 Current liabilities 2,005,459 25,422,094 2,878,428,946 (185,916,356 ) 2,719,940,143 Non-current liabilities 150,223,767 6,858 4,622,020 — 154,852,645 Total liabilities 152,229,226 25,428,952 2,883,050,966 (185,916,356 ) 2,874,792,788 Total revenues 1,290,388 65,295,325 260,518,378 (62,615,929 ) 264,488,162 Net income (loss) 14,690,701 (700,720 ) 16,389,903 (15,689,183 ) 14,690,701 Net cash (used in) provided by operating activities (2,956,553 ) 18,431,299 397,729,210 — 413,203,956 Net cash (used in) provided by investing activities (307,315,533 ) (4,048,620 ) (8,395,110 ) 330,678,088 10,918,825 Net cash provided by (used in) financing activities 330,881,355 (5,091,778 ) 335,769,866 (330,678,088 ) 330,881,355 (1) The disclosed amounts of the VIEs were before elimination adjustments of intercompany transactions within the Group.
For the year ended December 31, 2021: Parent VIEs (1) Subsidiaries eliminating adjustments Consolidated (2) Current assets 170,220,287 51,873,657 3,234,726,520 (185,548,937 ) 3,271,271,527 Non-current assets 428,634,807 16,083,322 34,013,807 (428,584,807 ) 50,147,129 Total assets 598,855,094 67,956,979 3,268,740,327 (614,133,744 ) 3,321,418,656 Current liabilities 2,005,459 25,422,094 2,878,428,946 (185,916,356 ) 2,719,940,143 Non-current liabilities 150,223,767 6,858 4,622,020 — 154,852,645 Total liabilities 152,229,226 25,428,952 2,883,050,966 (185,916,356 ) 2,874,792,788 Total revenues 1,290,388 65,295,325 260,518,378 (62,615,929 ) 264,488,162 Net income (loss) 14,690,701 (700,720 ) 16,389,903 (15,689,183 ) 14,690,701 Net cash (used in) provided by operating activities (2,956,553 ) 18,431,299 397,729,210 — 413,203,956 Net cash (used in) provided by investing activities (307,315,533 ) (4,048,620 ) (8,395,110 ) 330,678,088 10,918,825 Net cash provided by (used in) financing activities 330,881,355 (5,091,778 ) 335,769,866 (330,678,088 ) 330,881,355 (1) The disclosed amounts of the VIEs were before elimination adjustments of intercompany transactions within the Group.
If we or any of the VIEs are found to be in violation of any existing or future PRC laws or regulations, fail to obtain or maintain any of the required permits or approvals, or inadvertently conclude that such permissions or approvals are not required, or if applicable laws, regulations, or interpretations change and we are required to obtain such permissions or approvals in the future but are unable or fail to do so, the relevant PRC 11 Table of Contents regulatory authorities would have broad discretion to take action in dealing with such violations or failures, including: • revoking the business licenses and/or any permits held by such entities; • discontinuing or placing restrictions or onerous conditions on our activities through any transactions between our WFOEs and the VIEs; • imposing fines, confiscating the income from our WFOEs or the VIEs, or imposing other requirements with which we or the VIEs may not be able to comply; • requiring us to restructure our ownership structure or activities, including terminating the contractual arrangements with the VIEs and deregistering the equity pledges of the VIEs, which in turn would affect our ability to consolidate, derive economic benefits from, or exert effective control over the VIEs; or • restricting or prohibiting our use of the proceeds of our initial public offering and concurrent private placement to finance our business and activities in China.
If we or any of the VIEs are found to be in violation of any existing or future PRC laws or regulations, fail to obtain or maintain any of the required permits or approvals, or inadvertently conclude that such permissions or approvals are not required, or if applicable laws, regulations, or interpretations change and we are required to obtain such permissions or approvals in the future but are unable or fail to do so, the relevant PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures, including, without limitation: • revoking the business licenses and/or any permits held by such entities; • discontinuing or placing restrictions or onerous conditions on our activities through any transactions between our WFOEs and the VIEs; • imposing fines, confiscating the income from our WFOEs or the VIEs, or imposing other requirements with which we or the VIEs may not be able to comply; 11 Table of Contents • requiring us to restructure our ownership structure or activities, including terminating the contractual arrangements with the VIEs and deregistering the equity pledges of the VIEs, which in turn would affect our ability to consolidate, derive economic benefits from, or exert effective control over the VIEs; or • restricting or prohibiting our use of the proceeds of our initial public offering and concurrent private placement to finance our business and activities in China.
Regulations Relating to Anti-monopoly According to the Anti-Monopoly Law of the People’s Republic of China (the “ Anti-Monopoly Law ”) which was promulgated by the SCNPC on August 30, 2007, amended on June 24, 2022, and the 2022 revision became effective on August 1, 2022, the Anti-Monopoly Law applies to the monopolistic practices in domestic economic activities in China as well as the monopolistic practices outside China which have exclusion or restriction effects on domestic market competition.
Regulations Relating to Anti-Monopoly According to the Anti-Monopoly Law of the People’s Republic of China, or the Anti-Monopoly Law, which was promulgated by the SCNPC on August 30, 2007, amended on June 24, 2022, and the 2022 revision became effective on August 1, 2022, the Anti-Monopoly Law applies to the monopolistic practices in domestic economic activities in China as well as the monopolistic practices outside China which have exclusion or restriction effects on domestic market competition.
Although the 2020 Specification clarifies issues such as biometric data, multiple business functions, and explicit consent, it is still unclear to what extent the new standard will be enforced in China. Furthermore, on August 20, 2021, the SCNPC promulgated Personal Information Protection Law which became effective on November 1, 2021.
Although the 2020 Specification clarifies issues such as biometric data, multiple business functions, and explicit consent, it is still unclear to what extent the new standard will be enforced in China. Furthermore, on August 20, 2021, the SCNPC promulgated the Personal Information Protection Law, or the Information Protection Law, which became effective on November 1, 2021.
See Item 3.D “Risk Factors - Risks Related to Our Business and Industry-We may not be able to obtain or maintain all necessary licenses, permits and approvals and to make all necessary registrations and filings for our activities in multiple jurisdictions and related to residents therein, especially in China or otherwise related to PRC residents.” We could be subject to disciplinary or other actions in the future due to claimed or deemed non-compliant, which could have a material adverse effect on our business, financial condition and results of operations as further described under “-Non-compliance with applicable laws in certain jurisdictions could harm our business, reputation, financial condition and results of operations.” 47 Table of Contents Accusations or claims against us may adversely affect our business operations and reputation.
See Item 3.D “Risk Factors - Risks Related to Our Business and Industry-We may not be able to obtain or maintain all necessary licenses, permits and 48 Table of Contents approvals and to make all necessary registrations and filings for our activities in multiple jurisdictions and related to residents therein, especially in China or otherwise related to PRC residents.” We could be subject to disciplinary or other actions in the future due to claimed or deemed non-compliant, which could have a material adverse effect on our business, financial condition and results of operations as further described under “-Non-compliance with applicable laws in certain jurisdictions could harm our business, reputation, financial condition and results of operations.” Accusations or claims against us may adversely affect our business operations and reputation.
We may pursue acquisitions or joint ventures that could present unforeseen integration obstacles, incur unpredicted costs or may not enhance our business as we expected. We have made a few selective acquisitions recently to expand our business into new areas and jurisdictions. We may in the future continue to pursue acquisitions and joint ventures as part of our growth strategy.
We may pursue acquisitions or joint ventures that could present unforeseen integration obstacles, incur unpredicted costs or may not enhance our business as we expected. We have made a few selective acquisitions to expand our business into new areas and jurisdictions. We may in the future continue to pursue acquisitions and joint ventures as part of our growth strategy.
In addition to those risks described under the heading “Any future change in the regulatory and legal regime for the securities brokerage industry may have a significant impact on our business model,” we will be exposed to additional risks as a result of doing business internationally, including: • the difficulty of managing and staffing international operations and the increased operations, travel, infrastructure and legal compliance costs associated with numerous international locations; • challenges to our corporate culture resulting from a dispersed workforce; • new and different sources of competition; 62 Table of Contents • difficulties in complying with a wider array of regulatory requirements, including without limitation regulations relating to currency and capital, transfers of funds, taxation, privacy and protection of customer data, broker-dealer requirements, and intellectual property; • compliance with various anti-bribery and anti-corruption laws such as the Foreign Corrupt Practices Act of 1977, or FCPA; • adverse tax consequences; • fluctuations in currency exchange rates; and • political or social developments, including unrest or economic instability, in a specific country or region in which we operate, which could have an adverse impact on our operations in that location.
In addition to those risks described under the heading “Any future change in the regulatory and legal regime for the securities brokerage industry may have a significant impact on our business model,” we will be exposed to additional risks as a result of doing business internationally, including: • the difficulty of managing and staffing international operations and the increased operations, travel, infrastructure and legal compliance costs associated with numerous international locations; • challenges to our corporate culture resulting from a dispersed workforce; • new and different sources of competition; • difficulties in complying with a wider array of regulatory requirements, including without limitation regulations relating to currency and capital, transfers of funds, taxation, privacy and protection of customer data, broker-dealer requirements, and intellectual property; • compliance with various anti-bribery and anti-corruption laws such as the Foreign Corrupt Practices Act of 1977, or FCPA; • adverse tax consequences; • fluctuations in currency exchange rates; and • political or social developments, including unrest or economic instability, in a specific country or region in which we operate, which could have an adverse impact on our operations in that location.
Condensed Consolidated Financial Information relating to the VIEs As of and for the year ended December 31, 2022: Parent VIEs (1) Subsidiaries eliminating adjustments Consolidated (2) Current assets 156,457,176 58,095,337 3,728,088,018 (204,061,664 ) 3,738,578,867 Non-current assets 447,647,877 12,145,470 46,556,051 (447,567,877 ) 58,781,521 Total assets 604,105,053 70,240,807 3,774,644,069 (651,629,541 ) 3,797,360,388 Current liabilities 2,249,610 29,848,034 3,353,074,361 (204,615,982 ) 3,180,556,023 Non-current liabilities 154,725,906 640,527 9,809,298 — 165,175,731 Total liabilities 156,975,516 30,488,561 3,362,883,659 (204,615,982 ) 3,345,731,754 Total revenues 1,706,054 44,382,701 220,243,411 (40,966,619 ) 225,365,547 Net income (loss) (2,186,441 ) (8,220,848 ) 9,178,824 (1,028,415 ) (2,256,880 ) Net cash provided by (used in) operating activities 613,623 (1,552,547 ) 258,999,523 — 258,060,599 Net cash (used in) provided by investing activities (14,271,671 ) (416,486 ) (2,022,732 ) 13,098,888 (3,612,001 ) Net cash provided by (used in) financing activities 366,540 3,760,937 13,701,872 (13,098,888 ) 4,730,461 (1) The disclosed amounts of the VIEs were before elimination adjustments of intercompany transactions within the Group.
As of and for the year ended December 31, 2022: Parent VIEs (1) Subsidiaries eliminating adjustments Consolidated (2) Current assets 156,457,176 58,095,337 3,728,088,018 (204,061,664 ) 3,738,578,867 Non-current assets 447,647,877 12,145,470 46,556,051 (447,567,877 ) 58,781,521 Total assets 604,105,053 70,240,807 3,774,644,069 (651,629,541 ) 3,797,360,388 Current liabilities 2,249,610 29,848,034 3,353,074,361 (204,615,982 ) 3,180,556,023 Non-current liabilities 154,725,906 640,527 9,809,298 — 165,175,731 Total liabilities 156,975,516 30,488,561 3,362,883,659 (204,615,982 ) 3,345,731,754 Total revenues 1,706,054 44,382,701 220,243,411 (40,966,619 ) 225,365,547 Net (loss) income (2,186,441 ) (8,220,848 ) 9,178,824 (1,028,415 ) (2,256,880 ) Net cash provided by (used in) operating activities 613,623 (1,552,547 ) 258,999,523 — 258,060,599 Net cash (used in) provided by investing activities (14,271,671 ) (416,486 ) (2,022,732 ) 13,098,888 (3,612,001 ) Net cash provided by (used in) financing activities 366,540 3,760,937 13,701,872 (13,098,888 ) 4,730,461 (1) The disclosed amounts of the VIEs were before elimination adjustments of intercompany transactions within the Group.
In general, the holding company transfers funds from financing (including funds from its IPO, follow-on equity offerings, and offerings of convertible bonds, as applicable) to Licensed Entities in the form of capital injections or loans to support their business expansion.
In general, the holding company transfers funds from financing (including funds from its IPO, follow-on equity offerings, and offerings of convertible bonds, as applicable) to Licensed Entities in the form of capital injections or loans in order to support their business expansion.
In addition to market and industry factors, the price and trading volume for our ADSs may be highly volatile for factors specific to our own operations, including the following: • variations in our revenues, earnings and cash flow; • announcements of new product and service offerings, investments, acquisitions, strategic partnerships, joint ventures, or capital commitments by us or our competitors; • changes in the performance or market valuation of our company or our competitors; • changes in financial estimates by securities analysts; • changes in the number of our users and customers; • fluctuations in our operating metrics; • failures on our part to realize monetization opportunities as expected; • additions or departures of our key management and personnel; • release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; • detrimental negative publicity about us, our competitors or our industry; 71 Table of Contents • news regarding governmental or regulatory developments or focus that may affect our industry or us specifically; • market conditions affecting us or our industry; and • potential litigations or regulatory investigations.
In addition to market and industry factors, the price and trading volume for our ADSs may be highly volatile for factors specific to our own operations, including the following: • variations in our revenues, earnings and cash flow; • announcements of new product and service offerings, investments, acquisitions, strategic partnerships, joint ventures, or capital commitments by us or our competitors; • changes in the performance or market valuation of our company or our competitors; • changes in financial estimates by securities analysts; • changes in the number of our users and customers; • fluctuations in our operating metrics; • failures on our part to realize monetization opportunities as expected; • additions or departures of our key management and personnel; • release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; • detrimental negative publicity about us, our competitors or our industry; • news regarding governmental or regulatory developments or focus that may affect our industry or us specifically; • market conditions affecting us or our industry; and • potential litigations or regulatory investigations.
On the same day, the CSRC also held a press conference for the release of the Overseas Listing Trial Measures and issued the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies, which, among others, clarifies that (i) prior to the effective date of the Overseas Listing Trial Measures, Chinese mainland domestic companies that have already completed overseas listing shall be regarded as “existing companies”, which are not required to fulfill filing procedure immediately but shall be required to complete the filing if such existing 21 Table of Contents companies conduct refinancing in the future; and (ii) the CSRC will solicit opinions from relevant regulatory authorities and complete the filing of the overseas listing of companies with contractual arrangements which duly meet the compliance requirements, and support the development and growth of these companies by enabling them to utilize two markets and two kinds of resources.
On the same day, the CSRC also held a press conference for the release of the Overseas Listing Trial Measures and issued the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies, which, among others, clarifies that (i) prior to the effective date of the Overseas Listing Trial Measures, Chinese mainland domestic companies that have already completed overseas listing shall be regarded as “existing companies”, which are not required to fulfill filing procedure immediately but shall be required to complete the filing if such existing companies conduct refinancing in the future; and (ii) the CSRC will solicit opinions from relevant regulatory authorities and complete the filing of the overseas listing of companies with contractual arrangements which duly meet the compliance requirements, and support the development and growth of these companies by enabling them to utilize two markets and two kinds of resources.
Key Information – Certain Risks Related to Our Chinese Operations and Operating Structure – We may be adversely affected by the complexity, uncertainties and changes in PRC regulation of Internet-related businesses and companies, and any lack of requisite licenses, permits or approvals applicable to our business may have a material adverse effect on our business and results of operations.” Regulations on Internet Audio-Video Program Services The Administrative Regulations on Internet Audio-Video Program Services , or the Internet Audio-Video Program Services Regulations promulgated by the State Administration of Press, Publication, Radio, Film and Television, or the “SAPPRFT” (which has been divided into National Radio and Television Administration, or NRTA, National 29 Table of Contents Press and Publication Administration, or NPPA, and China Film Administration), which became effective on January 31, 2008 and was amended on August 28, 2015, sets forth the principal rules and requirements on the Internet audio-video program services.
Key Information – Certain Risks Related to Our Chinese Operations and Operating Structure – We may be adversely affected by the complexity, uncertainties and changes in PRC regulation of Internet-related businesses and companies, and any lack of requisite licenses, permits or approvals applicable to our business may have a material adverse effect on our business and results of operations.” Regulations on Internet Audio-Video Program Services The Administrative Regulations on Internet Audio-Video Program Services , or the Internet Audio-Video Program Services Regulations promulgated by the State Administration of Press, Publication, Radio, Film and Television, or the “SAPPRFT” (which has been divided into National Radio and Television Administration, or NRTA, National Press and Publication Administration, or NPPA, and China Film Administration), which became effective on January 31, 2008 and was amended on August 28, 2015, sets forth the principal rules and requirements on the Internet audio-video program services.
Beijing Rongke made a written submission to the SAFE, which clarified that, among others, (i) at that time, Beijing Rongke was a related party to Tiger Holdings Group Limited (already de-registered), both of which did not participate in the process of the foreign currency purchase by our customers, and (ii) Beijing Rongke was a technology company and Tiger Holdings Group Limited was a registered financial service 36 Table of Contents provider in New Zealand.
Beijing Rongke made a written submission to the SAFE, which clarified that, among others, (i) at that time, Beijing Rongke was a related party to Tiger Holdings Group 37 Table of Contents Limited (already de-registered), both of which did not participate in the process of the foreign currency purchase by our customers, and (ii) Beijing Rongke was a technology company and Tiger Holdings Group Limited was a registered financial service provider in New Zealand.
Furthermore, on November 14, 2021, the Cyberspace Administration of China, or the CAC, released the Regulations on the Network Data Security, or “the Draft Regulations,” for public comments, which stipulates, among others, that a prior cybersecurity review is required for listing abroad of data processors which process over one million users’ personal information, and the listing of data processors in Hong Kong which affects or may affect national security.
Furthermore, on November 14, 2021, the Cyberspace Administration of China, or the CAC, released the Regulations on the Network Data Security , or the Draft Regulations, for public comments, which stipulates, among others, that a prior cybersecurity review is required for listing abroad of data processors which process over one million users’ personal information, and the listing of data processors in Hong Kong which affects or may affect national security.
PRC Regulations Relating to Dividend Distribution The principal regulations governing the distribution of dividends paid by wholly foreign-owned enterprises include the Wholly Foreign-Owned Enterprise Law issued in 1986 and most recently amended in 2016, and the Detailed Rules for the Implementation of the Law of the People’s Republic of China on Wholly Foreign-owned Enterprises issued in 1990 and most recently amended in 2014 , both of which have been superseded from January 1, 2020 by the FIL and FIL Implementation Rules, and the Company Law of the People’s Republic of China issued in 1999 and most recently amended in 2018.
PRC Regulations Relating to Dividend Distribution The principal regulations governing the distribution of dividends paid by wholly foreign-owned enterprises include the Wholly Foreign-Owned Enterprise Law issued in 1986 and most recently amended in 2016, and the Detailed Rules for the Implementation of the Law of the People’s Republic of China on Wholly Foreign-owned Enterprises issued in 1990 and most recently amended in 2014 , both of which have been superseded from January 1, 2020 by the FIL and FIL Implementation Rules, and the Company Law of the People’s Republic of China issued in 1999 and most recently amended in 2023.
To date, except as disclosed under the risk factor headed “We may be adversely affected by the complexity, uncertainties and changes in the PRC regulations of Internet-related businesses and companies, and any lack of requisite licenses, permits or approvals applicable to our business may have a material adverse effect on our business and results of operations” and subject to the official interpretation and implementation of and potential further action pursuant to CSRC 1230 Notice, to our knowledge our PRC subsidiaries and the VIEs have received all permissions or approvals that we believe are required and necessary to conduct our current business operations within the PRC in all material aspects.
To date, except as disclosed under the risk factor headed “We may be adversely affected by the complexity, uncertainties and changes in the PRC regulations of Internet-related businesses and companies, and any lack of requisite licenses, permits or approvals applicable to our business may have a material adverse effect on our business and results of operations” and subject to the official interpretation and implementation of and potential further action pursuant to CSRC 1230 Notice, to our knowledge our PRC subsidiaries and the VIEs have received all permissions or approvals that we believe are required and necessary to conduct our current business operations within the PRC in 26 Table of Contents all material aspects.
Risk Factors.” Certain Risks Related to Our Chinese Operations and Operating Structure Shareholders may face difficulties in protecting you r interests, and your ability to protect your rights through the U.S. courts may be limited, because we are registered under Cayman Islands law. We are an exempted company limited by shares incorporated under the laws of the Cayman Islands.
Risk Factors.” Certain Risks Related to Our Chinese Operations and Operating Structure Shareholders may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. courts may be limited, because we are registered under Cayman Islands law. We are an exempted company limited by shares incorporated under the laws of the Cayman Islands.
If the agreements that establish the structure f or operating some of our activities in China do not comply with PRC regulations, if we fail to obtain all required permissions and approvals required by Chinese regulatory authorities, or if these regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.
If the agreements that establish the structure for operating some of our activities in China do not comply with PRC regulations, if we fail to obtain all required permissions and approvals required by Chinese regulatory authorities, or if these regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.
While, as of December 31, 2021, based on our management’s assessment on the performance of the remediation measures, we determined that the material weakness had been remediated, and no material weakness existed as of December 31, 2022, in the future we may determine that we have additional material weaknesses, or our independent registered public accounting firm may disagree with our management assessment of the effectiveness of our internal controls.
While, as of December 31, 2021, based on our management’s assessment on the performance of the remediation measures, we determined that the material weakness had been remediated, and no material weakness existed as of December 31, 2023, in the future we may determine that we have additional material weaknesses, or our independent registered public accounting firm may disagree with our management assessment of the effectiveness of our internal controls.
As a company incorporated in the Cayman Islands with ADSs listed on the Nasdaq Global Select Market, we follow our home country practice instead of Nasdaq requirements that mandate that: • the board of directors be comprised of a majority of independent directors; • the directors be selected or nominated by a majority of the independent directors or a nomination committee comprised solely of independent directors; 74 Table of Contents • the board of directors adopt a formal written charter or board resolution addressing the director nominations process and such related matters as may be required under the U.S. federal securities laws; and • the compensation of our executive officers be determined or recommended by a compensation committee comprised solely of independent directors.
As a company incorporated in the Cayman Islands with ADSs listed on the Nasdaq Global Select Market, we follow our home country practice instead of Nasdaq requirements that mandate that: • the board of directors be comprised of a majority of independent directors; • the directors be selected or nominated by a majority of the independent directors or a nomination committee comprised solely of independent directors; • the board of directors adopt a formal written charter or board resolution addressing the director nominations process and such related matters as may be required under the U.S. federal securities laws; and • the compensation of our executive officers be determined or recommended by a compensation committee comprised solely of independent directors.
Risk Factors.” 40 Table of Contents Summary of Certain Risks Related to Our Chinese Operations and Operating Structure Risk Factor Page Shareholders may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. courts may be limited, because we are registered under Cayman Islands law. 10 If the agreements that establish the structure for operating some of our activities in China do not comply with PRC regulations, if we fail to obtain all required permissions and approvals required by Chinese regulatory authorities, or if these regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations. 11 Uncertainties exist with respect to the interpretation and implementation of the newly enacted Foreign Investment Law of the PRC and how it may impact the viability of our current corporate structure, corporate governance and business operations. 12 We rely on contractual arrangements with the VIEs and their respective shareholders for a large portion of our business operations, which may not be as effective as equity ownership in providing operational control, and which we may not be able to enforce in a court of law. 13 Any failure by the VIEs or their shareholders to perform their obligations under our contractual arrangements with them would have a material and adverse effect on our business. 14 The shareholders of the VIEs may have potential conflicts of interest with us, which may materially and adversely affect our business. 14 Contractual arrangements in relation to the VIEs may be subject to scrutiny by the PRC tax authorities and they may determine that we or our PRC VIEs owe additional taxes, which could negatively affect our financial condition and the value of your investment. 15 We may lose the ability to use and enjoy assets held by the VIEs that are material to the operation of certain portions of our business if the VIEs go bankrupt or become subject to a dissolution or liquidation proceeding. 15 The PRC government may intervene or impose restrictions on our ability to transfer cash to or from the holding company, the subsidiaries, the VIEs and investors. 15 If we fail to protect customer data and privacy, our reputation, financial condition and results of operations will be materially and adversely affected. 15 We may be subject to regulatory compliance costs and enforcement activity relating to Chinese privacy and data security laws. 17 We may be adversely affected by the complexity, uncertainties and changes in the PRC regulations of Internet-related businesses and companies, and any lack of requisite licenses, permits or approvals applicable to our business may have a material adverse effect on our business and results of operations. 18 The audit report included in this annual report has been prepared by our independent registered public accounting firm, whose work the Public Company Accounting Oversight Board was previously unable to inspect and, as such, you have previously been deprived of the benefits of such inspection and may be deprived of such benefits in the future if the work of our independent registered public accounting firm is unable to be inspected again. 19 41 Table of Contents We may be subject to consequences pursuant to the Holding Foreign Companies Accountable Act and related regulations, including the potential for our ADSs to be prohibited from trading on U.S. securities exchanges, including The Nasdaq Stock Market, and in the U.S. over-the-counter market, which will limit the liquidity of our ADSs and our access to U.S. capital markets. 20 We are subject to numerous regulations in the PRC, and compliance with these regulations may result in costs, expenses, regulatory enforcement action, and reputational harm that may have a material adverse effect on our business and results of operations. 20 The legal system of the PRC is not fully developed and there are uncertainties that may affect the protection afforded to us. 21 The PRC government may intervene or influence our operations at any time, and it has recently indicated an intent to exert more oversight and control over overseas securities offerings and other capital markets activities and foreign investment in China-based companies. 21 PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using proceeds we received from our initial public offering and the Concurrent Private Placement to make loans or additional capital contributions to our PRC subsidiaries. 22 We may be subject to penalties, including restrictions on our ability to inject capital into our PRC subsidiaries, if our PRC resident shareholders or beneficial owners fail to comply with relevant PRC foreign exchange regulations. 23 You may be subject to PRC withholding tax on dividends from us and PRC income tax on any gain realized on the transfer of our shares or ADSs if we are deemed a PRC resident enterprise. 23 We may not be able to obtain certain tax benefits for dividends paid by our PRC subsidiaries to us through our Hong Kong subsidiaries. 24 PRC regulations may restrict our ability to convert Renminbi into foreign currency and remit such currency out of the PRC to pay capital expenses. 24 We are subject to additional risks as a result of doing business in China, as summarized immediately below and described in more detail below under the heading “Risks Related to Doing Business in China.” 42 Table of Contents Summary of Risks Related to Doing Business in China Risk Factor Page The current trade war between the U.S. and China, and on a larger scale internationally, may dampen growth in China and other markets where the majority of our customers reside, and our activities and results may be negatively impacted. 66 PRC economic, political and social conditions as well as government policies could adversely affect our business and prospects. 66 We may be subject to penalties for failure to fully comply with the NDRC and the MOFCOM filing requirements for historical overseas investments. 67 The enforcement of the Labor Contract Law of the People’s Republic of China, or the PRC Labor Contract Law, and other labor-related regulations in the PRC may increase our labor costs and impose limitations on our labor practices. 67 Failure to make adequate contributions to various employee benefit plans as required by the PRC regulations may subject us to penalties. 68 Any failure to comply with PRC regulations regarding the registration requirements for employee share incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions. 68 We may be deemed to be a PRC resident enterprise under the Enterprise Income Tax Law, or the EIT Law, and be subject to the PRC taxation on our worldwide income, which may significantly increase our income tax expenses and materially decrease our profitability. 69 We face uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies. 69 Our leased property interest may be defective and our right to lease the properties may be affected by such defects, which could cause significant disruption to our business. 70 If the settlement reached between the SEC and the Big Four PRC-based accounting firms (including the Chinese affiliates of our independent registered public accounting firms), concerning the manner in which the SEC may seek access to audit working papers from audits in China of U.S.-listed companies, is not or cannot be performed in a manner acceptable to authorities in China and the United States, we could be unable to timely file future financial statements in compliance with the requirements of the Exchange Act. 70 Risks Related to Our Business and Industry We have a limited operating history and our historical financial, operating results and growth rates may not be indicative of future performance.
Risk Factors.” Summary of Certain Risks Related to Our Chinese Operations and Operating Structure Risk Factor Page Shareholders may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. courts may be limited, because we are registered under Cayman Islands law. 10 If the agreements that establish the structure for operating some of our activities in China do not comply with PRC regulations, if we fail to obtain all required permissions and approvals required by Chinese regulatory authorities, or if these regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations. 11 Uncertainties exist with respect to the interpretation and implementation of the Foreign Investment Law of the PRC and how it may impact the viability of our current corporate structure, corporate governance and business operations. 12 We rely on contractual arrangements with the VIEs and their respective shareholders for a large portion of our business operations, which may not be as effective as equity ownership in providing operational control, and which we may not be able to enforce in a court of law. 13 Any failure by the VIEs or their shareholders to perform their obligations under our contractual arrangements with them would have a material and adverse effect on our business. 13 The shareholders of the VIEs may have potential conflicts of interest with us, which may materially and adversely affect our business. 14 Contractual arrangements in relation to the VIEs may be subject to scrutiny by the PRC tax authorities and they may determine that we or our PRC VIEs owe additional taxes, which could negatively affect our financial condition and the value of your investment. 14 We may lose the ability to use and enjoy assets held by the VIEs that are material to the operation of certain portions of our business if the VIEs go bankrupt or become subject to a dissolution or liquidation proceeding. 15 The PRC government may intervene or impose restrictions on our ability to transfer cash to or from the holding company, the subsidiaries, the VIEs and investors. 15 If we fail to protect customer data and privacy, our reputation, financial condition and results of operations will be materially and adversely affected. 15 We may be subject to regulatory compliance costs and enforcement activity relating to Chinese privacy and data security laws. 16 42 Table of Contents We may be adversely affected by the complexity, uncertainties and changes in the PRC regulations of Internet-related businesses and companies, and any lack of requisite licenses, permits or approvals applicable to our business may have a material adverse effect on our business and results of operations. 17 The audit report included in this annual report has been prepared by our independent registered public accounting firm, whose work the Public Company Accounting Oversight Board was previously unable to inspect and, as such, you have previously been deprived of the benefits of such inspection and may be deprived of such benefits in the future if the work of our independent registered public accounting firm is unable to be inspected again. 19 We may be subject to consequences pursuant to the Holding Foreign Companies Accountable Act and related regulations, including the potential for our ADSs to be prohibited from trading on U.S. securities exchanges, including The Nasdaq Stock Market, and in the U.S. over-the-counter market, which will limit the liquidity of our ADSs and our access to U.S. capital markets. 19 We are subject to numerous regulations in the PRC, and compliance with these regulations may result in costs, expenses, regulatory enforcement action, and reputational harm that may have a material adverse effect on our business and results of operations. 20 The legal system of the PRC is developing and rapidly evolving, and there are uncertainties that may affect the protection afforded to us. 20 The PRC government’s significant oversight over our business operation could result in a material adverse change in our operations and the value of our ADSs, and it has recently indicated an intent to exert more oversight and control over overseas securities offerings and other capital markets activities and foreign investment in China-based companies. 21 PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using proceeds we received from our initial public offering and the Concurrent Private Placement to make loans or additional capital contributions to our PRC subsidiaries. 22 We may be subject to penalties, including restrictions on our ability to inject capital into our PRC subsidiaries, if our PRC resident shareholders or beneficial owners fail to comply with relevant PRC foreign exchange regulations. 22 You may be subject to PRC withholding tax on dividends from us and PRC income tax on any gain realized on the transfer of our shares or ADSs if we are deemed a PRC resident enterprise. 23 We may not be able to obtain certain tax benefits for dividends paid by our PRC subsidiaries to us through our Hong Kong subsidiaries. 24 PRC regulations may restrict our ability to convert Renminbi into foreign currency and remit such currency out of the PRC to pay capital expenses. 24 We are subject to additional risks as a result of doing business in China, as summarized immediately below and described in more detail below under the heading “Risks Related to Doing Business in China.” 43 Table of Contents Summary of Risks Related to Doing Business in China Risk Factor Page Geopolitical and regulatory tensions between the U.S. and China, and on a larger scale internationally, may dampen growth in China and other markets where the majority of our customers reside, and our activities and results may be negatively impacted. 67 PRC economic, political and social conditions as well as government policies could adversely affect our business and prospects. 67 We may be subject to penalties for failure to fully comply with the NDRC and the MOFCOM filing requirements for historical overseas investments. 67 The enforcement of the Labor Contract Law of the People’s Republic of China, or the PRC Labor Contract Law, and other labor-related regulations in the PRC may increase our labor costs and impose limitations on our labor practices. 68 Failure to make adequate contributions to various employee benefit plans as required by the PRC regulations may subject us to penalties. 68 Any failure to comply with PRC regulations regarding the registration requirements for employee share incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions. 69 We may be deemed to be a PRC resident enterprise under the Enterprise Income Tax Law, or the EIT Law, and be subject to the PRC taxation on our worldwide income, which may significantly increase our income tax expenses and materially decrease our profitability. 69 We face uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies. 70 Our leased property interest may be defective and our right to lease the properties may be affected by such defects, which could cause significant disruption to our business. 70 If the settlement reached between the SEC and the Big Four PRC-based accounting firms (including the Chinese affiliates of our independent registered public accounting firms), concerning the manner in which the SEC may seek access to audit working papers from audits in China of U.S.-listed companies, is not or cannot be performed in a manner acceptable to authorities in China and the United States, we could be unable to timely file future financial statements in compliance with the requirements of the Exchange Act. 70 Risks Related to Our Business and Industry We have a limited operating history and our historical financial, operating results and growth rates may not be indicative of future performance.
The PRC government may intervene or impose restrictions on our ability to transfer cash to or from the holding company, the subsidiaries, the VIEs and investors. A majority of our revenues were generated from our wholly owned subsidiaries in New Zealand, Singapore and the United States for the years ended December 31, 2020, 2021 and 2022.
The PRC government may intervene or impose restrictions on our ability to transfer cash to or from the holding company, the subsidiaries, the VIEs and investors. A majority of our revenues were generated from our wholly owned subsidiaries in New Zealand, Singapore and the United States for the years ended December 31, 2021, 2022 and 2023.
If the settlement reached between the SEC and the Big Four PRC-based accounting firms (including the Chinese affiliates of our independent registered public accounting firms), concerning the manner in which the SEC may seek access to audit working papers from audits in China of U.S.-listed companies, is not or cannot be performed in a manner acceptable to authorities in China and the United States, we could be unable to timely file future financial statements in compliance with the requirements of the Exchange Act.
If the settlement reached between the SEC and the Big Four PRC-based accounting firms (including the Chinese affiliates of our independent registered public accounting firms), concerning the manner in which the SEC may seek access to audit working papers from audits in China of U.S.-listed companies, is not or cannot be performed 70 Table of Contents in a manner acceptable to authorities in China and the United States, we could be unable to timely file future financial statements in compliance with the requirements of the Exchange Act.
The 2020 Specification, which took effect on October 1, 2020, explains and reinforces the Cyber Security Law. Though the 2020 Specification is not a mandatory national standard but a recommended guideline, and it is not enforceable by law, the authority will use this standard to evaluate an entity’s compliance with China’s legal guidelines and regulations.
The 2020 Specification, which took effect on October 1, 2020, explains and reinforces the Cyber Security Law. Though the 2020 Specification is not a mandatory national standard but a recommended guideline, and it is not enforceable by law, the authority may use this standard to evaluate an entity’s compliance with China’s legal guidelines and regulations.
We depend on key management as well as experienced and capable personnel, and our business may be adversely affected if we are unable to hire and retain qualified employees. Our key management includes our Chief Executive Officer or CEO, Mr. Tianhua Wu, our Chief Financial Officer or CFO, Mr. John Fei Zeng, and our Chief Compliance Officer, Ms.
We depend on key management as well as experienced and capable personnel, and our business may be adversely affected if we are unable to hire and retain qualified employees. Our key management includes our Chief Executive Officer or CEO, Mr. Tianhua Wu and our Chief Financial Officer or CFO, Mr. John Fei Zeng.
See “— Certain Risks Related to Our Chinese Operations and Operating Structure – We may be subject to penalties, including restrictions on our ability to inject capital into our PRC subsidiaries, if our PRC resident shareholders or beneficial owners fail to comply with relevant PRC foreign exchange regulations.” PRC Regulations Relating to the Individual Foreign Exchange On December 25, 2006, the PBOC issued the Administrative Measures for Individual Foreign Exchange , or the PBOC Order 3, which took effect on February 1, 2007.
Key Information— Certain Risks Related to Our Chinese Operations and Operating Structure – We may be subject to penalties, including restrictions on our ability to inject capital into our PRC subsidiaries, if our PRC resident shareholders or beneficial owners fail to comply with relevant PRC foreign exchange regulations.” PRC Regulations Relating to the Individual Foreign Exchange On December 25, 2006, the PBOC issued the Administrative Measures for Individual Foreign Exchange , or the PBOC Order 3, which took effect on February 1, 2007.
Certain Summary Financial Information Regarding the Company, Its Subsidiaries, and Consolidated VIEs Cash Flows Among the Company, Its Subsidiaries, and Consolidated VIEs The Group’s main revenues were mostly generated from our wholly owned subsidiaries in New Zealand, Singapore and the United States for the years ended December 31, 2020, 2021 and 2022.
Certain Summary Financial Information Regarding the Company, Its Subsidiaries, and Consolidated VIEs Cash Flows Among the Company, Its Subsidiaries, and Consolidated VIEs The Group’s main revenues were mostly generated from our wholly owned subsidiaries in New Zealand, Singapore and the United States for the years ended December 31, 2021, 2022 and 2023.
Such limitations on use of dispatched labor may increase our labor costs and impose limitations on our employment practices, which may adversely affect our business and profitability. Failure to make adequate contributions to various employee benefit plans as required by the PRC regulations may subject us to penalties.
Such limitations on use of dispatched labor may increase our labor costs and impose limitations on our employment practices, which may adversely affect our business and profitability. Failure to make adequate contributions t o various employee benefit plans as required by the PRC regulations may subject us to penalties.
Under the Telecommunications Regulations and relevant administrative measures, commercial operators of value-added telecommunications services must first obtain a license for conducting Internet content provision services, or an “ICP License,” from the Ministry of Industry and Information Technology, or the MIIT, or its provincial level branches.
Under the Telecommunications Regulations and relevant administrative measures, commercial operators of value-added telecommunications services must first obtain a license for conducting Internet content provision services, or an “ICP License”, from the Ministry of Industry and Information Technology, or the MIIT, or its provincial level branches.
In October 2021, Up Fintech International Limited completed its acquisition of 100% of the equity of Ocean Joy Holdings Limited (“Ocean Joy”), and its sole subsidiary Tiger Brokers (HK) Global Limited (“Tiger Brokers HK”, formerly known as Ocean Joy Securities Limited), a licensed corporation of the Securities and Futures Commission of Hong Kong (“SFC”) holding Type 1 (“Dealing in Securities”), Type 2 (“Dealing in Futures Contracts”), Type 4 (“Advising on Securities”) and Type 5 (“Advising on Futures Contracts”) licenses.
In October 2021, Up Fintech International Limited completed its acquisition of 100% of the equity of Ocean Joy Holdings Limited (“Ocean Joy”), and its sole subsidiary Tiger Brokers (HK) Global Limited (“Tiger Brokers HK”, formerly known as Ocean Joy Securities Limited), a licensed corporation of the Securities and Futures Commission of Hong Kong (“SFC”) holding Type 1 (“Dealing in Securities”), Type 2 (“Dealing in Futures Contracts”), Type 4 (“Advising on Securities”), Type 5 (“Advising on Futures Contracts”) and Type 9 (“Asset Management”) licenses.
In addition, 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, 2022. See “Item 15.
In addition, 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. See “Item 15.
We expect our business expansion to continue as we grow our customer base and explore new market opportunities. However, due to our limited operating history, our historical growth rates may not be indicative of our 43 Table of Contents future performance.
We expect our business expansion to continue as we grow our customer base and explore new market opportunities. However, due to our limited operating history, our historical growth rates may not be indicative of our 44 Table of Contents future performance.
The PRC economy differs from the economies of most developed countries in many aspects, including, but not limited to, the degree of government involvement, control level of corruption, control of capital investment, reinvestment control of foreign exchange, allocation of resources, growth rate and development level.
The PRC economy differs from the economies of most developed countries in many aspects, including, but not limited to, the degree of government involvement, control of capital investment, control of foreign exchange, allocation of resources, growth rate and development level.
We could face material and adverse tax consequences if the PRC tax authorities determine that the VIE contractual arrangements were not entered into on an arm’s length basis in such a way as to result in an impermissible reduction in taxes under applicable PRC laws, rules and regulations, and adjust the income of the VIEs in the form of a transfer pricing adjustment.
We could face material and adverse tax consequences if the PRC tax 14 Table of Contents authorities determine that the VIE contractual arrangements were not entered into on an arm’s length basis in such a way as to result in an impermissible reduction in taxes under applicable PRC laws, rules and regulations, and adjust the income of the VIEs in the form of a transfer pricing adjustment.
Consistent with the HFCAA, these amendments require the submission of documentation to the SEC establishing that a “Commission-Identified Issuer” is not owned or controlled by a governmental entity in that foreign jurisdiction and also require disclosure in a foreign issuer’s annual report regarding the audit arrangements of, and governmental influence on, such registrant, including any consolidated VIEs or other similar structures.
Consistent with the HFCAA, these amendments require the submission of documentation to the SEC establishing that a “Commission-Identified Issuer” is not owned or controlled by a governmental entity in that foreign jurisdiction and also require disclosure in a foreign issuer’s annual report regarding the audit arrangements of, and governmental influence on, such registrant, 19 Table of Contents including any consolidated VIEs or other similar structures.
In addition, since we may pursue acquisitions as one of our growth strategies, and may conduct acquisitions involving complex corporate structures, the PRC tax authorities might impose taxes on capital gains or request that we submit certain 69 Table of Contents additional documentation for their review in connection with any potential acquisitions, which may incur additional acquisition costs, or delay our acquisition timetable.
In addition, since we may pursue acquisitions as one of our growth strategies, and may conduct acquisitions involving complex corporate structures, the PRC tax authorities might impose taxes on capital gains or request that we submit certain additional documentation for their review in connection with any potential acquisitions, which may incur additional acquisition costs, or delay our acquisition timetable.
In addition, pursuant to the Decision on Strengthening Internet Information Protection issued by the SCNPC in December 2012, the Order for the Protection of Telecommunication and Internet User’s Personal Information issued by the MIIT in July 2013 and Cyber Security Law, any collection and use of a user’s personal information 31 Table of Contents must be subject to the consent of the user, abide by the principles of legality, rationality and necessity and be within the specified purposes, methods and scopes.
In addition, pursuant to the Decision on Strengthening Internet Information Protection issued by the SCNPC in December 2012, the Order for the Protection of Telecommunication and Internet User’s Personal Information issued by the MIIT in July 2013 and the Cyber Security Law, any collection and use of a user’s personal information must be subject to the consent of the user, abide by the principles of legality, rationality and necessity and be within the specified purposes, methods and scopes.
As a result, investors may not avail themselves of the same information or protection that would be available to investors in a U.S. domestic issuer. Because we are a foreign private issuer organized under the laws of a non-U.S. country, it may be more difficult for investors and regulators to bring actions against us and our officers and directors.
As a result, investors may not avail themselves of the same information or protection that would be available to investors in a U.S. domestic issuer. 74 Table of Contents Because we are a foreign private issuer organized under the laws of a non-U.S. country, it may be more difficult for investors and regulators to bring actions against us and our officers and directors.
In addition, we reprint some articles related to the stock market on our website and APP, and therefore may be subject to permit and approval requirements from the State Council Information Office. Furthermore, we also need to strictly follow the requirements applicable to online content providers set forth by the relevant regulatory authorities, especially for financial information.
In addition, we reprint some articles related to the stock market on our website and APP, and therefore may be subject to permit and approval requirements from the State Council Information Office. Furthermore, we also need to strictly follow the requirements applicable to online content providers set forth by the relevant regulatory authorities, especially for financial information. See “Item 3.
Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions. We may also be required to restate our financial statements for prior periods.
Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions. We may also be required to restate our financial statements for prior 47 Table of Contents periods.
We do not own such entities due to the restriction of foreign investment in businesses providing value-added telecommunication services in China, including Internet information provision services. This may significantly disrupt our business, subject us to sanctions, compromise enforceability of related contractual arrangements, or have other harmful effects on us.
We do not own such entities due to the restriction of foreign investment in businesses providing value-added 17 Table of Contents telecommunication services in China, including Internet information provision services. This may significantly disrupt our business, subject us to sanctions, compromise enforceability of related contractual arrangements, or have other harmful effects on us.
Regulations Relating to Intellectual Property Rights PRC Regulations for Copyright The Copyright Law of the PRC , promulgated in 1990 and amended in 2001 and 2010, or the “Copyright Law,” and its related implementing regulations, promulgated in 2002 and amended in 2013, are the principal laws and regulations governing the copyright related matters.
Regulations Relating to Intellectual Property Rights PRC Regulations for Copyright The Copyright Law of the PRC , promulgated in 1990 and amended in 2001 and 2010, or the Copyright Law, and its related implementing regulations, promulgated in 2002 and amended in 2013, are the principal laws and regulations governing the copyright related matters.
While we will make best efforts to continue to fulfill the requirements under any applicable future PRC laws and 45 Table of Contents regulations, there may be substantial uncertainties regarding the interpretation and application of current or any future PRC laws and regulations applicable to our business and the PRC government or other governmental authorities may ultimately take a view that is inconsistent with our opinion.
While we will make best efforts to continue to fulfill the requirements under any applicable future PRC laws and regulations, there may be substantial uncertainties regarding the interpretation and application of current or any future PRC laws and regulations applicable to our business and the PRC government or other governmental authorities may ultimately take a view that is inconsistent with our opinion.
Under the applicable laws and regulations in the relevant jurisdictions such as New Zealand, the United States, Singapore and China, we are not required to, and we do not, maintain any insurance in relation to our business operations, such as data security insurance, business interruption insurance, or liability insurance against liabilities arising from customer complaints 61 Table of Contents and litigation or other aspects of our business.
Under the applicable laws and regulations in the relevant jurisdictions such as New Zealand, the United States, Singapore and China, we are not required to, and we do not, maintain any insurance in relation to our business operations, such as data security insurance, business interruption insurance, or liability insurance against liabilities arising from customer complaints and litigation or other aspects of our business.
See Item 7.A “Major Shareholders.” As a result of the dual-class share structure and the concentration of ownership, holders of Class B ordinary shares will have considerable influence over matters such as decisions regarding mergers, consolidations and the sale of all or substantially all of our assets, election of directors and other significant corporate actions.
See Item 7.A “Major Shareholders.” As a result of the dual-class share structure 73 Table of Contents and the concentration of ownership, holders of Class B ordinary shares will have considerable influence over matters such as decisions regarding mergers, consolidations and the sale of all or substantially all of our assets, election of directors and other significant corporate actions.
On August 26, 2022, the PCAOB announced that it signed a Statement of Protocol with the China Securities Regulatory Commission (the “CSRC”) and the Ministry of Finance, which it described as the first step toward opening access for the PCAOB to inspect and investigate completely registered public accounting firms in Chinese mainland and Hong Kong.
On August 26, 2022, the PCAOB announced that it signed a Statement of Protocol with the China Securities Regulatory Commission , or the CSRC, and the Ministry of Finance, which it described as the first step toward opening access for the PCAOB to inspect and investigate completely registered public accounting firms in Chinese mainland and Hong Kong.
In addition, according to the Cyber Security Law, operators of key information infrastructures, which include public communications and information service, energy, transportation, water conservancy, financial industry, public services, e-government affairs and other important industries and fields, shall store personal information and important data gathered and produced during operations in the PRC within the territory of the PRC.
In addition, according to the Cyber Security Law, operators of key information infrastructures, which include public communications and information service, energy, transportation, water conservancy, financial industry, public services, e-government affairs and other important industries and fields, shall store personal information and 30 Table of Contents important data gathered and produced during operations in the PRC within the territory of the PRC.
The Information Protection Law also expressly stipulates that those who process personal information in violation of regulations or fail to take necessary security measures when processing personal 32 Table of Contents information will be ordered to make corrections by the authority responsible for personal information protection, and given a warning, with their illegal gains confiscated.
The Information Protection Law also expressly stipulates that those who process personal information in violation of regulations or fail to take necessary security measures when processing personal information will be ordered to make corrections by the authority responsible for personal information protection, and given a warning, with their illegal gains confiscated.
For example, Tiger Brokers (NZ) Limited was visited by the FMA for an Anti-Money Laundering/Combating the Financing of 54 Table of Contents Terrorism (“AMLCFT”) inspection in October 2019. In April 2020, FMA had issued a formal public warning (the “Warning Letter”), which identified potential violations of the AMLCFT caused by historical control weaknesses.
For example, Tiger Brokers (NZ) Limited was visited by the FMA for an Anti-Money Laundering/Combating the Financing of Terrorism (“AMLCFT”) inspection in October 2019. In April 2020, FMA had issued a formal public warning (the “Warning Letter”), which identified potential violations of the AMLCFT caused by historical control weaknesses.
As we increase the number of consolidated accounts, we also expect cash segregated for regulatory purposes and payables to customers on our balance sheet to increase significantly. A failure in our information technology, or IT, systems could cause interruptions in our services, undermine the responsiveness of our services, disrupt our business, damage our reputation and cause losses.
As we increase the number of consolidated accounts, we also expect cash segregated for regulatory purposes and payables to customers on our balance sheet to increase significantly. 55 Table of Contents A failure in our information technology, or IT, systems could cause interruptions in our services, undermine the responsiveness of our services, disrupt our business, damage our reputation and cause losses.
Although our customer agreements require customers to acknowledge that they will observe all insider trading, money laundering and securities fraud laws and regulations in applicable jurisdictions and to assume liabilities for all restrictions, penalties and other responsibilities arising from conducts suspected to constitute insider trading, money laundering and/or, securities fraud, we cannot verify whether every transaction conducted by our customers is in compliance with such laws and regulations because our customers may circumvent our due diligence measures to commit insider trading and/or money laundering.
Although our customer agreements require customers to acknowledge that they will observe all insider trading, money laundering and securities fraud laws and regulations in applicable jurisdictions and to assume liabilities for all restrictions, penalties and other responsibilities arising from conducts suspected to constitute insider trading, money 58 Table of Contents laundering and/or, securities fraud, we cannot verify whether every transaction conducted by our customers is in compliance with such laws and regulations because our customers may circumvent our due diligence measures to commit insider trading and/or money laundering.
Item 3. Key Information UP Fintech is not a Chinese operating company but a Cayman Islands holding company with no material operations of its own, whose operations are conducted by its subsidiaries and through contractual arrangements with VIEs based in China. This structure involves unique risks to investors.
Item 3. Key Info rmation UP Fintech is not a Chinese operating company but a Cayman Islands holding company with no material operations of its own, whose operations are conducted by its subsidiaries and through contractual arrangements with VIEs based in China. This structure involves unique risks to investors.
We rely on contractual arrangements with the VI Es and their respective shareholders for a large portion of our business operations, which may not be as effective as equity ownership in providing operational control, and which we may not be able to enforce in a court of law. We are a holding company with no material operations of our own.
We rely on contractual arrangements with the VIEs and their respective shareholders for a large portion of our business operations, which may not be as effective as equity ownership in providing operational control, and which we may not be able to enforce in a court of law. We are a holding company with no material operations of our own.
Further, if any person, including any of our employees, negligently disregards or intentionally breaches our established controls with respect to customer data, or otherwise mismanages or misappropriates that data, we could be subject to significant monetary damages, regulatory enforcement actions, fines or even criminal prosecution in one or more jurisdictions.
Further, if any person, including any of our employees, negligently disregards or intentionally 15 Table of Contents breaches our established controls with respect to customer data, or otherwise mismanages or misappropriates that data, we could be subject to significant monetary damages, regulatory enforcement actions, fines or even criminal prosecution in one or more jurisdictions.
We may be subject to regulatory compliance costs and enforcement activity relating to Chinese privacy and data security laws. In China, the government is still ramping up regulations with regard to personal information protection. On October 1, 2020, the Information Security Technology - Personal Information Security Specification (GB/T 35273-2020) (“2020 Specification”) took effect.
We may be subject to regulatory compliance costs and enforcement activity relating to Chinese privacy and data security laws. In China, the government is still ramping up regulations with regard to personal information protection. On October 1, 2020, the Information Security Technology - Personal Information Security Specification (GB/T 35273-2020) , or the 2020 Specification took effect.
Although we have made substantial efforts to ensure our compliance with the applicable privacy regulations in various jurisdictions, we may not be capable of adjusting our internal policies in a timely 16 Table of Contents manner and any failure to comply with applicable regulations could also result in regulatory enforcement actions against us.
Although we have made substantial efforts to ensure our compliance with the applicable privacy regulations in various jurisdictions, we may not be capable of adjusting our internal policies in a timely manner and any failure to comply with applicable regulations could also result in regulatory enforcement actions against us.
Beijing Rongke also undertakes that upon the request of Beijing Bohu, it will assist Beijing Bohu in the consummation of the assignment or transfer of the relevant intellectual property rights, including but not limited to entering into a transfer 26 Table of Contents or license agreement at no or a nominal consideration as well as fulfilling the necessary registration.
Beijing Rongke also undertakes that upon the request of Beijing Bohu, it will assist Beijing Bohu in the consummation of the assignment or transfer of the relevant intellectual property rights, including but not limited to entering into a transfer or license agreement at no or a nominal consideration as well as fulfilling the necessary registration.
Tianhua Wu and some other individual shareholders who indirectly hold shares in our Company and who are known to us as being PRC residents had completed the necessary registrations with the local SAFE branch or qualified banks as required by the SAFE Circular 37 in relation to their investment in our company.
Tianhua Wu and some other individual shareholders who indirectly hold shares in our Company and who are known to us as being PRC residents had completed the necessary registrations with the local SAFE branch or qualified banks as required by the SAFE Circular 37 in relation to their investment in our company. See “Item 3.
Any potential flaw in our KYC system or any misconduct in the KYC procedures by any of our employees may also lead to our failure of compliance with such relevant laws and regulations, which will further 58 Table of Contents subject us to certain legal or regulatory sanctions, fines or penalties, financial loss, or damage to reputation.
Any potential flaw in our KYC system or any misconduct in the KYC procedures by any of our employees may also lead to our failure of compliance with such relevant laws and regulations, which will further subject us to certain legal or regulatory sanctions, fines or penalties, financial loss, or damage to reputation.
Additionally, if we are not able to secure additional funding in the future from our existing counterparties or others on favorable terms or at all, our financial condition, growth prospects, and results of operations may be adversely affected. Our brokerage operations have exposure to liquidity risk. Our brokerage operations have exposure to liquidity risk.
Additionally, if we are not able to secure additional funding in the future from our existing counterparties or others on favorable terms or at all, our financial condition, growth prospects, and results of operations may be adversely affected. 60 Table of Contents Our brokerage operations have exposure to liquidity risk. Our brokerage operations have exposure to liquidity risk.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeWe have diversified the source of our financing through collaboration with our financial institution partners where we can combine collateral from our clients into portfolios and pledge the portfolios to financial institutions for commercial loans. 87 Table of Contents Asset Management and Wealth Management Services Although our asset management and wealth management services are still at the ramping-up stage, we believe they are an integral part of our comprehensive services package and a major focus for future growth.
Biggest changeWhen we launched our margin financing business, we financed mostly from our own working capital and retained earnings. We have diversified the source of our financing through collaboration with our financial institution partners where we can combine collateral from our clients into portfolios and pledge the portfolios to financial institutions for commercial loans.
Under the SFA, there is a requirement to maintain sufficient capital (“CAR”) as part of its condition to operate the business in Singapore. CAR is calculated using a risk-based capital approach.
Under the SFA, there is a requirement to maintain sufficient capital (“CAR”) as part of its condition to operate the business in Singapore. CAR is calculated using a risk-based capital approach.
Identifying, measuring and managing risks are critical to minimizing damages to our business, operations and financial condition. Our compliance and legal departments work together with management to identify and manage all risks. We have implemented policies and procedures for identifying, measuring and managing risks, which include establishing threshold levels for our most significant risks.
Identifying, measuring and managing risks are critical to minimizing damages to our business, operations and financial condition. Our compliance and legal departments work together with management to identify and manage risks. We have implemented policies and procedures for identifying, measuring and managing risks, which include establishing threshold levels for our most significant risks.
Substantive obligations As AFSL holders, TBAU and Fleming are subject to the following obligations (among others): • to comply with various financial, capital and audit requirements; • to ensure that a nominated “responsible manager” is allocated responsibility for each financial service provided; • to ensure that its representatives who provide financial services are adequately trained and competent to do so; • to comply with the “client money” rules under Chapter 7.8 of the Corporations Act; • to comply with the financial record and order record keeping requirements under Chapter 7.8 of the Corporations Act; • to ensure it has in place adequate compliance arrangements in respect of the financial services it provides; • to have adequate financial, technological and human resources to provide the financial services covered by its license; • to comply with Australian financial services laws, and to take reasonable steps to ensure that its representatives comply with Australian financial services laws; • to do all things necessary to ensure that the Australian regulated activities are provided efficiently, honestly and fairly; • to have in place adequate arrangements for the management of conflicts of interest; • to have adequate risk management systems; and • to report significant breaches of Australian financial services laws, and its AFSL conditions, to the Australian Securities and investments Commission.
Substantive obligations As AFSL holders, TBAU and Fleming are subject to the following obligations (among others): • to comply with various financial, capital and audit requirements; • to ensure that a nominated “responsible manager” is allocated responsibility for each financial service provided; • to ensure that its representatives who provide financial services are adequately trained and competent to do so; • to comply with the “client money” rules under Chapter 7.8 of the Corporations Act; • to comply with the financial record and order record keeping requirements under Chapter 7.8 of the Corporations Act; • to ensure it has in place adequate compliance arrangements in respect of the financial services it provides; 103 Table of Contents • to have adequate financial, technological and human resources to provide the financial services covered by its license; • to comply with Australian financial services laws, and to take reasonable steps to ensure that its representatives comply with Australian financial services laws; • to do all things necessary to ensure that the Australian regulated activities are provided efficiently, honestly and fairly; • to have in place adequate arrangements for the management of conflicts of interest; • to have adequate risk management systems; and • to report significant breaches of Australian financial services laws, and its AFSL conditions, to the Australian Securities and investments Commission.
TBAU’s AFSL (No. 300767) authorizes the licensee to carry on a financial services business to: (a) provide financial product advice for the following classes of financial products: (i) deposit and payment products limited to: (A) basic deposit products; (B) deposit products other than basic deposit products; (ii) derivatives; (iii) foreign exchange contracts; (iv) interests in managed investment schemes, including: (A) investor directed portfolio services; and (v) securities; (b) deal in a financial product by: (i) issuing, applying for, acquiring, varying or disposing of a financial product in respect of the following classes of financial products: (A) derivatives; (B) foreign exchange contracts; and (C) interests in managed investment schemes, limited to: (1) own managed investment scheme only; and (ii) applying for, acquiring, varying or disposing of a financial product on behalf of another person in respect of the following classes of products: (A) deposit and payment products limited to: (1) basic deposit products; (2) deposit products other than basic deposit products; (B) derivatives; (C) foreign exchange contracts; (D) interests in managed investment schemes, including: (1) investor directed portfolio services; and (E) securities; and (c) provide the following custodial or depository services: (i) operate custodial or depository services other than investor directed portfolio services; to retail and wholesale clients.
TBAU’s AFSL (No. 300767) authorizes the licensee to carry on a financial services business to: (a) provide financial product advice for the following classes of financial products: (i) deposit and payment products limited to: (A) basic deposit products; (B) deposit products other than basic deposit products; (ii) derivatives; (iii) foreign exchange contracts; (iv) interests in managed investment schemes, including: (A) investor directed portfolio services; and (v) securities; (b) deal in a financial product by: 102 Table of Contents (i) issuing, applying for, acquiring, varying or disposing of a financial product in respect of the following classes of financial products: (A) derivatives; (B) foreign exchange contracts; and (C) interests in managed investment schemes, limited to: (1) own managed investment scheme only; and (ii) applying for, acquiring, varying or disposing of a financial product on behalf of another person in respect of the following classes of products: (A) deposit and payment products limited to: (1) basic deposit products; (2) deposit products other than basic deposit products; (B) derivatives; (C) foreign exchange contracts; (D) interests in managed investment schemes, including: (1) investor directed portfolio services; and (E) securities; and (c) provide the following custodial or depository services: (i) operate custodial or depository services other than investor directed portfolio services; to retail and wholesale clients.
Investors should contact us for any inquiries through the address and telephone number of our principal executive offices. Our website is www.itiger.com . Information contained in, or accessible through, our website is not a part of, and is not incorporated into, this report. Contractual Arrangements with the VIEs and Their Respective Shareholders The information set forth under “Item 3.
Investors should contact us for any inquiries through the address and telephone number of our principal executive offices. Our website is www.itigerup.com . Information contained in, or accessible through, our website is not a part of, and is not incorporated into, this report. Contractual Arrangements with the VIEs and Their Respective Shareholders The information set forth under “Item 3.
We have an expansive base of high-quality corporate clientele which are highly synergetic to a number of our businesses such as brokerage and margin financing. We will continue to foster the deep connection between our retail and corporate clients and leverage the powerful flywheel inherent in our business model to accelerate growth and crystalize operating synergies.
We have an expansive base of high-quality corporate clientele which are highly synergetic to a number of our businesses such as brokerage and margin financing. We will continue to foster the deep connection between our retail and corporate clients and leverage the powerful flywheel inherent in our business model to accelerate growth and crystallize operating synergies.
Capital Expenditures and Divestitures For a description, including the amount invested, of the Company’s principal capital expenditures (including interests in other companies) for the years ended December 31, 2020, 2021 and 2022, see Item 5.B “Liquidity and Capital Resources-Capital Expenditures,” which disclosure is incorporated by reference in this item.
Capital Expenditures and Divestitures For a description, including the amount invested, of the Company’s principal capital expenditures (including interests in other companies) for the years ended December 31, 2021, 2022 and 2023, see Item 5.B “Liquidity and Capital Resources-Capital Expenditures,” which disclosure is incorporated by reference in this item.
Over the past six years, we have developed an integrated trading platform to create an efficient conduit for the global flow of capital across securities on electronic exchanges around the world, while at the same time maintaining one of the lowest fee schemes in the industry.
Over the past eight years, we have developed an integrated trading platform to create an efficient conduit for the global flow of capital across securities on electronic exchanges around the world, while at the same time maintaining one of the lowest fee schemes in the industry.
For additional information, please see Item 3.D “Risk Factors-Risks Related to Our Business and Industry-We may fail to update our risk management policies and procedures as needed and such policies and procedures may otherwise be ineffective, which may expose us to unidentified or unexpected risks.” Customer-Related Risks We interact with customers on a daily basis, exposing us to risks of customers conducting money laundering activities, fraud and other financial crimes.
For additional information, please see Item 3.D “Risk Factors-Risks Related to Our Business and Industry-We may fail to update our risk management policies and procedures as needed and such policies and procedures may otherwise be ineffective, which may expose us to unidentified or unexpected risks.” 92 Table of Contents Customer-Related Risks We interact with customers on a daily basis, exposing us to risks of customers conducting money laundering activities, fraud and other financial crimes.
We have developed “Tiger Education,” which is a set of educational programs designed to target customers with a variety of experience levels trading in stocks and other financial instruments. Our educational programs include basic rules and processes of trading, fundamental analysis methods and technical analysis methods.
We have developed “Tiger Academy,” which is a set of educational programs designed to target customers with a variety of experience levels trading in stocks and other financial instruments. Our educational programs include basic rules and processes of trading, fundamental analysis methods and technical analysis methods.
The SEC and other governmental agencies and self-regulatory organizations, as well as state securities commissions in the United States, have the power to conduct administrative 100 Table of Contents proceedings that can result in censure, penalties and fines, disgorgement of profits, restitution to customers, cease-and-desist orders or suspension, termination or limitation of the activities of the regulated entity or its employees.
The SEC and other governmental agencies and self-regulatory organizations, as well as state securities commissions in the United States, have the power to conduct administrative proceedings that can result in censure, penalties and fines, disgorgement of profits, restitution to customers, cease-and-desist orders or suspension, termination or limitation of the activities of the regulated entity or its employees.
Institutional and Corporate Services In 2022, we continued to expand a number of innovative services in order to attract new customers as well as to serve existing customers whom we expect to have a greater chance of cross-selling products or services.
Institutional and Corporate Services In 2023, we continued to expand a number of innovative services in order to attract new customers as well as to serve existing customers whom we expect to have a greater chance of cross-selling products or services.
We therefore maintain strict internal practices, procedures and controls enabling us to better protect our customers’ personal information, such as providing different levels of access rights. We use hardware security machines to encrypt sensitive customer information in our CRM system. Access to our information system is 94 Table of Contents granted to employees on an as-needed basis.
We therefore maintain strict internal practices, procedures and controls enabling us to better protect our customers’ personal information, such as providing different levels of access rights. We use hardware security machines to encrypt sensitive customer information in our CRM system. Access to our information system is granted to employees on an as-needed basis.
These contractual arrangements enable us to exercise effective control over the VIEs and their respective subsidiaries, receive substantially all of the economic benefits of such entities, and have an exclusive option to purchase all or part of the equity interests in and assets of them to the extent permitted by the applicable laws and regulations.
These contractual arrangements enable us to exercise effective control over the VIEs and their respective subsidiaries, receive substantially all of the economic benefits of such entities, and have an exclusive option to purchase all or part of the equity interests in and assets of them to the extent permitted by the applicable laws and 79 Table of Contents regulations.
For Tiger Brokers SG, the minimum base capital requirement is SGD 1 million and, in addition, the firm is required to analyze its operational risk and determine further capital requirement according to the risk the business faces.
For Tiger Brokers SG, the minimum base capital requirement is SGD 5 million and, in addition, the firm is required to analyze its operational risk and determine further capital requirement according to the risk the business faces.
For Tiger Brokers SG, the minimum base capital requirement is SGD 1 million and, in addition, the firm is required to analyze its operational risk and determine further capital requirement according to the risk the business faces.
For Tiger Brokers SG, the minimum base capital requirement is SGD 5 million and, in addition, the firm is required to analyze its operational risk and determine further capital requirement according to the risk the business faces.
Our primary competitors include online brokers and other firms providing online brokerage services. Nevertheless, we believe that our diverse product offerings, advanced technology infrastructure, efficient trade execution, top quality customer services and competitive pricing together make us one of the top performers in this market.
Our primary competitors include online brokers and other firms providing online brokerage services. Nevertheless, we believe that our diverse product 95 Table of Contents offerings, advanced technology infrastructure, efficient trade execution, top quality customer services and competitive pricing together make us one of the top performers in this market.
Its financial resources (which definition includes its base capital) cannot fall below its total risk requirement (i.e. the amount required to address risks arising from its activities), and in the case that its financial 93 Table of Contents resources fall below 120% of its total risk requirement, it is required to immediately notify the MAS of this fact. • Credit risk .
Its financial resources (which definition includes its base capital) cannot fall below its total risk requirement (i.e. the amount required to address risks arising from its activities), and in the case that its financial resources fall below 120% of its total risk requirement, it is required to immediately notify the MAS of this fact. • Credit risk .
Key Information – Certain Risks Related to Our Chinese Operations and Operating Structure –If we fail to protect customer data and privacy, our reputation, financial condition and results of operations will be materially and adversely affected” and “— Risk Factors – Risks Related to Our Business and Industry – We may fail to protect our platform from cyber-attacks, which may adversely affect our reputation, customer base and business.” Intellectual Property We rely on a combination of trademark, copyright and trade secret protection laws in China and other jurisdictions, as well as confidentiality procedures and contractual provisions to protect our intellectual properties and our brand.
Key Information – Certain Risks Related to Our Chinese Operations and Operating Structure –If we fail to protect customer data and privacy, our reputation, financial condition and results of operations will be materially and adversely affected” and Item 3.D “Risk Factors – Risks Related to Our Business and Industry – We may fail to protect our platform from cyber-attacks, which may adversely affect our reputation, customer base and business.” Intellectual Property We rely on a combination of trademark, copyright and trade secret protection laws in China and other jurisdictions, as well as confidentiality procedures and contractual provisions to protect our intellectual properties and our brand.
The Investment Advisers Act imposes numerous obligations on registered investment advisers such as Wealthn LLC, including recordkeeping, operational and marketing requirements, disclosure obligations and prohibitions on fraudulent activities. State-level regulations through the Attorneys General, state securities regulators and other state level agencies also apply to certain activities of Wealthn LLC.
The Investment Advisers Act imposes numerous obligations on registered investment advisers such as Wealthn LLC, including recordkeeping, operational and marketing requirements, disclosure obligations and prohibitions on fraudulent activities. State-level regulations 101 Table of Contents through the Attorneys General, state securities regulators and other state level agencies also apply to certain activities of Wealthn LLC.
Our Hong Kong subsidiary, Tiger Brokers (HK) Global Limited is a licensed corporation of SFC holding Type 1 (“Dealing in Securities”), Type 2 (“Dealing in Futures Contracts”), Type 4 (“Advising on Securities”) and Type 5 (“Advising on Futures Contracts”) licenses. Our Australian subsidiary, Fleming, holds an Australian financial services license.
Our Hong Kong subsidiary, Tiger Brokers (HK) Global Limited is a licensed corporation of SFC holding Type 1 (“Dealing in Securities”), Type 2 (“Dealing in Futures Contracts”), Type 4 (“Advising on Securities”), Type 5 (“Advising on Futures Contracts”) licenses and Type 9 (“Asset Management”). Our Australian subsidiary, Fleming, holds an Australian financial services license.
We generate revenues primarily by charging our customers commission fees for trading of securities as well as earning interest income or financing service fees arising from or related to margin financing and securities borrowing and lending transactions provided by ourselves or third parties to our customers for trading activities.
We generate revenues primarily by charging our customers commission fees for trading of securities as well as earning interest income or financing service fees arising from or related to margin financing and securities borrowing and 82 Table of Contents lending transactions provided by ourselves or third parties to our customers for trading activities.
We will further develop AI, big data and algorithmic capabilities to optimize our value propositions and improve operating efficiency, including: • Continuous investment into our advanced data warehouse and user profiling systems to empower marketing intelligence, which allows us to optimize customer experience through more personalized product offerings and recommendations, and enhancing user engagement and retention via our persistent focus on precise client management, customer profiling and labelling; • Integrating artificial intelligence and quantitative modelling tools into our platform, therefore making our platform increasingly smart and agile when offering financial advisory and portfolio construction to our customers; and • Continuous cost optimization and improvement of operating efficiency through process automation.
We will further develop AI, big data and algorithmic capabilities to optimize our value propositions and improve operating efficiency, including: • Continuous investment into our advanced data warehouse and user profiling systems to empower marketing intelligence, which allows us to optimize customer experience through more personalized product offerings and recommendations, and enhancing user engagement and retention via our persistent focus on precise client management, customer profiling and labelling; • Integrating artificial intelligence and quantitative modelling tools into our platform, therefore making our platform increasingly smart and agile when offering financial advisory and portfolio construction to our customers.
On October 17, 2017, the SAT issued the 106 Table of Contents Circular on Issues of Tax Withholding regarding Non-PRC Resident Enterprise Income Tax , or the SAT Circular 37, which further elaborates the relevant implemental rules regarding the calculation, reporting and payment obligations of the withholding tax by the non-resident enterprises.
On October 17, 2017, the SAT issued the Circular on Issues of Tax Withholding regarding Non-PRC Resident Enterprise Income Tax , or the SAT Circular 37, which further elaborates the relevant implemental rules regarding the calculation, reporting and payment obligations of the withholding tax by the non-resident enterprises.
PRC Regulations on Enterprise Income Tax Under the Enterprise Income Tax Law of the PRC , or the EIT Law, which became effective on January 1, 2008 and was amended on February 24, 2017, and its implementing rules, enterprises are classified as resident enterprises and non-resident enterprises.
PRC Regulations on Enterprise Income Tax Under the Enterprise Income Tax Law of the PRC , or the EIT Law, which became effective on January 1, 2008 and was amended on February 24, 2017 and December 29, 2018, and its implementing rules, enterprises are classified as resident enterprises and non-resident enterprises.
When a client trades exchange-traded products (e.g., listed company shares), TBAU will act as an intermediary and instruct market participants to enter trades on the exchange according to client orders. 102 Table of Contents TBAU is authorized under its AFSL to provide general financial product advice to retail and wholesale clients in those authorized financial products.
When a client trades exchange-traded products (e.g., listed company shares), TBAU will act as an intermediary and instruct market participants to enter trades on the exchange according to client orders. TBAU is authorized under its AFSL to provide general financial product advice to retail and wholesale clients in those authorized financial products.
For consolidated accounts, we carry out customer due diligence of our customers before establishing any relationship or conducting any transaction, 92 Table of Contents pursuant to the anti-money laundering rules and regulations in New Zealand.
For consolidated accounts, we carry out customer due diligence of our customers before establishing any relationship or conducting any transaction, pursuant to the anti-money laundering rules and regulations in New Zealand.
We have a dedicated team of customer support personnel that handles customer inquiries about our trading platform via phone call and online message. Our business and customer support team consisted of 108 employees as of December 31, 2022 and operates for around 20 hours every trading day to serve our customers across the world.
We have a dedicated team of customer support personnel that handles customer inquiries about our trading platform via phone call and online message. Our business and customer support team consisted of 168 employees as of December 31, 2023 and operates for around 20 hours every trading day to serve our customers across the world.
It also lays out the SAT negative factors that shall be taken into account when assessing whether a recipient of China-source income is a Beneficial Owner under tax treaty.
It also lays out the SAT negative factors that shall be taken into account when assessing whether a recipient of China-source income is a Beneficial Owner under 106 Table of Contents tax treaty.
Subpart 5B of Part 6 of the FMCA regulates client money or property services by imposing: ▪ disclosure obligations for services for retail clients; ▪ conduct obligations; and ▪ obligations for handling client money and client property. 96 Table of Contents Certain of these obligations are summarized below.
Subpart 5B of Part 6 of the FMCA regulates client money or property services by imposing: ▪ disclosure obligations for services for retail clients; ▪ conduct obligations; and ▪ obligations for handling client money and client property. Certain of these obligations are summarized below.
Trading-Related Risks We are exposed to various trading-related risks arising from our brokerage operations, primarily market risk from financial market volatility and liquidity risk from inability to meet cash flow needs and regulatory requirements. Our management and risk management team work closely together to monitor our risk exposures throughout the day.
Trading-Related Risks We are exposed to various trading-related risks arising from our brokerage operations, primarily market risk from financial market volatility and liquidity risk from inability to meet cash flow needs and regulatory requirements. Our 93 Table of Contents management and risk management team work closely together to monitor our risk exposures throughout the day.
Types of Accounts While we also partner with other clearing agents, we substantially rely on Interactive Brokers to execute, settle and clear a substantial portion of the trades of the U.S. and Hong Kong stocks and other financial instruments, and to comply with certain federal, state and other laws, as discussed in more details in Item 4.B “Business Overview-Our Core Products and Services-Revenue Models.” There are two types of accounts on our platform, consolidated accounts and fully disclosed accounts, depending on the cooperative model with our clearing agents.
Types of Accounts While we also partner with other clearing agents, we cooperate with Interactive Brokers to execute, settle and clear a small portion of the trades of the U.S. and Hong Kong stocks and other financial instruments, and to comply with certain federal, state and other laws, as discussed in more details in Item 4.B “Business Overview-Our Core Products and Services-Revenue Models.” There are two main account types on our platform, consolidated accounts and fully disclosed accounts, depending on the cooperative model with our clearing agents.
See Item 3.D “Risk Factors-Risks Related to Our Business and Industry-Our insurance coverage may be inadequate to cover risks related to our business and operation.” Legal Proceedings As the date of this report, we are not a party to, and we are not aware of any threat of, any legal proceeding that, in the opinion of our management, is likely to have a significant effect on our financial position or profitability, nor 95 Table of Contents have we experienced any incident of non-compliance which, in the opinion of our directors, is likely to have a significant effect on our financial position or profitability.
See Item 3.D “Risk Factors-Risks Related to Our Business and Industry-Our insurance coverage may be inadequate to cover risks related to our business and operation.” Legal Proceedings As the date of this report, except for the litigation disclosed in Item 3.D “Risk Factors,” we are not a party to, and we are not aware of any threat of, any legal proceeding that, in the opinion of our management, is likely to have a significant effect on our financial position or profitability, nor have we experienced any incident of non-compliance which, in the opinion of our directors, is likely to have a significant effect on our financial position or profitability.
Under the fully disclosed accounts, we provide a user-friendly trading interface and infrastructure for the customers and we engage Interactive Brokers to perform the execution, clearing and settlement services. We are responsible 85 Table of Contents for technical support, customer service and marketing to the fully disclosed account customers.
Under the fully disclosed accounts, we provide a user-friendly trading interface and infrastructure for the customers and we engage Interactive Brokers to perform the execution, clearing and settlement services. We are responsible for technical support, customer service and marketing to the fully disclosed account customers.
A reporting entity must, as soon as practicable after establishing a business relationship or conducting an occasional transaction or activity, take reasonable steps to determine whether the customer or any beneficial owner is a 98 Table of Contents politically exposed person.
A reporting entity must, as soon as practicable after establishing a business relationship or conducting an occasional transaction or activity, take reasonable steps to determine whether the customer or any beneficial owner is a politically exposed person.
Users can log on, set up a paper account and use a predetermined amount of simulated funds to make simulated investments. Our Users and Customers We classify those who have registered on our platform as our users and those who have opened accounts on our platform as customers.
Users can log on, set up a paper account and use a predetermined amount of simulated funds to make simulated investments. Our Users and Customers We classify those who have registered on our platform as our users and those who have opened accounts on our platform as customers. Our customers include individual customers, corporate customers and institutional customers.
We had also obtained trademarks in jurisdictions such as Hong Kong, Singapore, Malaysia, EU, Indonesia, India, Philippines, Thailand, Australia and New Zealand, and submitted trademark applications in various jurisdictions. As of March 31, 2022, we had registered about 137 software copyrights and 6 artwork copyrights in China. Competition The online brokerage market is highly competitive and rapidly evolving.
We had also obtained trademarks in jurisdictions such as Hong Kong, Singapore, Malaysia, EU, Indonesia, India, Philippines, Thailand, Australia and New Zealand, and submitted trademark applications in various jurisdictions. As of March 31, 2024, we had registered about 166 software copyrights and 12 artwork copyrights in China. Competition The online brokerage market is highly competitive and rapidly evolving.
We incurred marketing and branding expenses of US$15.9 million, US$59.3 million and US$33.1 million in 2020, 2021 and 2022, respectively, accounting for 11.5%, 22.4% and 14.7%, respectively, of total revenues for the same periods. Customer Development Our users and potential customers can initiate contact with us through phone call and online message.
We incurred marketing and branding expenses of US$59.3 million, US$33.1 million and US$20.9 million in 2021, 2022 and 2023, respectively, accounting for 22.4%, 14.7% and 7.7%, respectively, of total revenues for the same periods. Customer Development Our users and potential customers can initiate contact with us through phone call and online message.
Hong Kong Regulations Relating to Securities and Futures Brokerage Providers Tiger Brokers (HK) Global Limited is a licensed corporation of the Securities and Futures Commission of Hong Kong (“SFC”) holding Type 1 (“Dealing in Securities”), Type 2 (“Dealing in Futures Contracts”), Type 4 (“Advising on Securities”) and Type 5 (“Advising on Futures Contracts”) licenses.
Hong Kong Regulations Relating to Securities and Futures Brokerage Providers Tiger Brokers HK is a licensed corporation of the Securities and Futures Commission of Hong Kong (“SFC”) holding Type 1 (“Dealing in Securities”), Type 2 (“Dealing in Futures Contracts”), Type 4 (“Advising on Securities”), Type 5 (“Advising on Futures Contracts”) and Type 9 (“Asset Management”) licenses.
We will continue to serve as a lifetime investment companion to our users through enhanced contents and tools, optimized platform features and incentive schemes that allow users to better trade, learn, practice, communicate, share and harvest with us.
As we introduce our users to a wider investment world, we grow with them. We will continue to serve as a lifetime investment companion to our users through enhanced contents and tools, optimized platform features and incentive schemes that allow users to better trade, learn, practice, communicate, share and harvest with us.
Our New Zealand and Singapore subsidiaries have contributed over 88.0% of total revenues for the year ended December 31, 2022. For a further description of the breakdown of our total revenues, see “Item 5. – A Operating Results,” which disclosure is incorporated by reference in this item.
Our New Zealand, U.S. and Singapore subsidiaries have contributed over 93.0% of total revenues for the year ended December 31, 2023. For a further description of the breakdown of our total revenues, see “Item 5. – A Operating Results,” which disclosure is incorporated by reference in this item.
In August 2022, our wholly owned subsidiary Tiger Brokers (HK) Global Limited (formerly known as Ocean Joy Securities Limited) was granted by the Hong Kong Securities and Futures Commission licenses for Type 4 Advising on Securities and Type 5 Advising on Futures Contracts regulated activities, which we believe will allow us to provide more types of service in the future to our clients in Hong Kong.
In August 2022, our wholly owned subsidiary Tiger Brokers HK was granted by the Hong Kong Securities and Futures Commission licenses for Type 4 Advising on Securities and Type 5 Advising on Futures Contracts regulated activities, which we believe will allow us to provide more types of service in the future to our clients in Hong Kong.
We then help companies manage the vesting and exercise of their equity incentive awards as well as educating company employees about ESOP. Overall, we have worked with over 419 corporate clients by the end of the year of 2022, including 26 new clients added in the fourth quarter of 2022.
We then help companies manage the vesting and exercise of their equity incentive awards as well as educating company employees about ESOP. Overall, we have worked with over 535 corporate clients by the end of the year of 2023, including 30 new clients added in the fourth quarter of 2023.
Our customers can also trade futures contracts, trade on margin and short sell on our trading platform. The aggregate trading volume amounted to US$68.5 billion during the fourth quarter of 2022. Below is the table of the operating data as of the dates or for the periods indicated.
Our customers can also trade futures contracts, trade on margin and short sell on our trading platform. The aggregate trading volume amounted to US$81.8 billion during the fourth quarter of 2023. Below is the table of the operating data as of the dates or for the periods indicated.
(2) Calculated based on the average number of trading days during the period of the U.S. and Hong Kong exchanges. (3) As of December 31, 2022, 300,233 of our customers had conducted at least one trading transaction on our platform in the preceding 12 months.
(2) Calculated based on the average number of trading days during the period of the U.S. and Hong Kong exchanges. (3) As of December 31, 2023, 297,242 of our customers had conducted at least one trading transaction on our platform in the preceding 12 months.
The Privacy Act provides for 13 overriding privacy principles. The 13 principles stipulate how information can be collected, used, disclosed and stored, and people’s rights to gain access to that information and ask for it to be corrected.
The 13 principles stipulate how information can be collected, used, disclosed and stored, and people’s rights to gain access to that information and ask for it to be corrected.
Furthermore, IPO distribution is also an integral part of our comprehensive services package and is a major focus for our future growth. It not only helps us strengthen our relationship with corporate clients, but also provides IPO subscription opportunities for our retail clients. In 2022, we participated in 24 U.S.
Furthermore, IPO distribution is also an integral part of our comprehensive services package and is a major focus for our future growth. It not only helps us strengthen our relationship with corporate clients, but also provides IPO subscription opportunities for our retail clients. In 2023, we participated in 28 U.S. and Hong Kong IPOs.
Insurance Our New Zealand operating entity, Tiger Brokers (NZ) Limited, has in place professional indemnity insurance and directors’ and officers’ liability insurance, each of which has a limit of indemnity of NZ$3 million and NZ$1 million respectively and covers worldwide (excluding the U.S. and Canada) jurisdictions and territories.
Insurance Our New Zealand subsidiaries, Tiger Brokers (NZ) Limited and Tiger Fintech (NZ) Limited, have in place professional indemnity insurance and directors’ and officers’ liability insurance, each of which has a limit of indemnity of NZ$1 million and NZ$1 million respectively and covers worldwide (excluding the U.S. and Canada) jurisdictions and territories.
Both companies are registered with the Financial Dispute Resolution Service. A customer is entitled to raise a complaint directly with Financial Dispute Resolution Service. If this occurs, Financial Dispute Resolution Service will work with the customer and the provider with the aim to reach agreement on any complaints regarding the provision of a financial service.
Both companies are registered with Financial Services Complaints Limited (“FSCL”). A customer is entitled to raise a complaint directly with FSCL. If this occurs, FSCL will work with the customer and the provider with the aim to reach agreement on any complaints regarding the provision of a financial service.
If an agreement cannot be achieved, Financial Dispute Resolution Service will make a decision on the complaint which is binding on the provider. The services provided by the Financial Dispute Resolution Service are free of charge for customers.
If an agreement cannot be achieved, FSCL will make a decision on the complaint which is binding on the provider. The services provided by FSCL are free of charge for customers.
The minimum deposit that customers must have to open and maintain a margin account so as to conduct margin trading and securities borrowing and lending transactions is currently set at US$2,000. The margin loan or funding is offered by our platform for consolidated account customers and by Interactive Brokers for fully disclosed account customers.
The minimum deposit that customers must have to open and maintain a margin account so as to conduct margin trading and securities borrowing and lending transactions is currently set by Interactive Brokers for fully disclosed account at US$2,000.
Our revenues were US$138.5 million, US$264.5 million and US$225.4 million in 2020, 2021 and 2022, respectively. We generated net income of US$19.2 million and US$14.7 million in 2020 and 2021, respectively and recorded net losses of US$2.3 million in 2022 and Our revenues in 2020, 2021 and 2022 were mainly generated in New Zealand, the U.S. and Singapore.
Our revenues were US$264.5 million, US$225.4 million and US$272.5 million in 2021, 2022 and 2023, respectively. We generated net income of US$14.7 million and US$33.0 million in 2021 and 2023, respectively and recorded net losses of US$2.3 million in 2022 and Our revenues in 2021, 2022 and 2023 were mainly generated in New Zealand, the U.S. and Singapore.
As of the date of this annual report, most of our entities were subject to the valued-added tax at the rate of 6% for services provided and 13% for goods sold as of December 31, 2022. 107 Table of Contents C. Organizational Structure UP Fintech is a holding company with no material operations of its own.
As of the date of this annual report, most of our entities were subject to the valued-added tax at the rate of 6% for services provided as of December 31, 2023. C. Organizational Structure UP Fintech is a holding company with no material operations of its own.
Our registered office in the Cayman Islands is P.O. Box 2547, 23 Lime Tree Bay Avenue, Grand Cayman, KY1-1104, Cayman Islands. Our agent for service of process in the United States is Puglisi & Associates, located at 850 Library Avenue, Suite 204 Newark, Delaware 19711 and the telephone number of our agent is (302) 738-6680.
Box 2547, 23 Lime Tree Bay Avenue, Grand Cayman, KY1-1104, Cayman Islands and our telephone number in Cayman Islands at this address is +1-345-745-5100. Our agent for service of process in the United States is Puglisi & Associates, located at 850 Library Avenue, Suite 204 Newark, Delaware 19711 and the telephone number of our agent is +302-738-6680.
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 these markets, will be aggregated when calculating the value of the client’s collateral.
All financing extended to our clients is secured by acceptable securities pledged to us. 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 these markets, will be aggregated when calculating the value of the client’s collateral.
This aim of the CRS is to detect and deter offshore tax evasion and the CRS requires financial institutions to carry out certain due diligence and reporting measures, including but not limited to, review of their financial accounts so as to identify the accounts held or controlled by relevant foreign tax residents and collect and, in the case where an AEOI agreement in place between the two jurisdictions requiring the provision of such information, report the relevant information to the local revenue authority for exchange with the jurisdiction(s) of tax residence of the account holder or controlling person. 105 Table of Contents The New Zealand Government has made international commitments to implement the CRS in full accordance with the CRS and also the commentary to the CRS with supplements of the aforementioned due diligent and reporting measures.
This aim of the CRS is to detect and deter offshore tax evasion and the CRS requires financial institutions to carry out certain due diligence and reporting measures, including but not limited to, review of their financial accounts so as to identify the accounts held or controlled by relevant foreign tax residents and collect and, in the case where an AEOI agreement in place between the two jurisdictions requiring the provision of such information, report the relevant information to the local revenue authority for exchange with the jurisdiction(s) of tax residence of the account holder or controlling person.
Moreover, we serve such issuers whom we expect to have a greater chance of cross-selling our IPO distribution services, while retaining such employees with equity incentive awards to trade and invest on our platform. As of December 31, 2022, we had worked with 419 corporate clients on ESOP management services.
Moreover, we serve such issuers whom we expect to have a greater chance of cross-selling our IPO distribution services, while retaining such employees with equity incentive awards to trade and invest on our platform. As of December 31, 2023, we have served 535 corporate clients via our ESOP business.
IPOs, far exceeding any of 81 Table of Contents our competitors in terms of deal count. In further, we offer ESOP employees and other brokerage customers personalized asset management and wealth management services at competitive prices, such as pre-IPO shares, overseas fund products or bonds, which then lead our users to allocate more of their wealth on our platform.
In further, we offer ESOP employees and other brokerage customers personalized asset management and wealth management services at competitive prices, such as pre-IPO shares, overseas fund products or bonds, which then lead our users to allocate more of their wealth on our platform.
New Zealand Regulations Relating to Securities and Futures Brokerage Business Operational Rules of the Exchanges on Which We Operate Client money or property services Tiger Brokers (NZ) Limited and Tiger Fintech (NZ) Limited provide “client money or property services” in New Zealand, which are regulated by the Financial Markets Conduct Act 2013 (as amended in March 2021 by the Financial Services Legislation Amendment Act 2019) (“ FMCA ”).
Key Information – Description of Certain PRC Regulations Affecting Our Business” is incorporated by reference herein. 96 Table of Contents New Zealand Regulations Relating to Securities and Futures Brokerage Business Operational Rules of the Exchanges on Which We Operate Client money or property services Tiger Brokers (NZ) Limited and Tiger Fintech (NZ) Limited provide “client money or property services” in New Zealand, which are regulated by the Financial Markets Conduct Act 2013 (as amended in March 2021 by the Financial Services Legislation Amendment Act 2019) (“ FMCA ”).
We have additionally formulated a series of internal procedures focused on minimizing operational risks. Our compliance department reviews and approves materials published for investor education, market information and community engagement to prevent the disclosure of any inaccurate information. We also monitor the interactions between our customer representatives and customers for any non-compliance with internal policies and regulatory rules.
Our compliance department reviews and approves materials published for investor education, market information and community engagement to prevent the disclosure of any inaccurate information. We also monitor the interactions between our customer representatives and customers for any non-compliance with internal policies and regulatory rules.
We designed our back-end system for easy modification, allowing us to increase system features, functions and capabilities efficiently as well as to handle a high volume of orders from customers at any one time. We ensure the security and integrity of all customer assets using various safeguards.
We designed our back-end system for easy modification, allowing us to increase system features, functions and capabilities efficiently as well as to handle a high volume of orders from customers at any one time.
We intend to continue focusing on a comprehensive and diversified suite of offerings to encompass: • Cross-market, multi-product investment experiences and product capabilities, including local-market equities, fund products and new economy investment assets; and • Innovative investing tools that leverage our strong product know-how to offer fund selection and portfolio construction not only to our customers, but also to our corporate clients to enable better services to their own clients.
We will solidify our position as the platform of choice for online investing to customers of all types throughout economic cycles. 83 Table of Contents We intend to continue focusing on a comprehensive and diversified suite of offerings to encompass: • Cross-market, multi-product investment experiences and product capabilities, including local-market equities, fund products and new economy investment assets; and • Innovative investing tools that leverage our strong product know-how to offer fund selection and portfolio construction not only to our customers, but also to our corporate clients to enable better services to their own clients.
Regulation This section summarizes the principal New Zealand, U.S., Singapore, Australia and Hong Kong laws and regulations relevant to our business and operations. Information regarding certain PRC regulations set forth under “Item 3. Key Information – Description of Certain PRC Regulations Affecting Our Business” is incorporated by reference herein.
Regulation This section summarizes the principal New Zealand, U.S., Singapore, Australia and Hong Kong laws and regulations relevant to our business and operations. Information regarding certain PRC regulations set forth under “Item 3.
Depending on the scale, operation, nature of business and risk profile of the licensed TCSP, the same person may be appointed as its CO and MLRO. Given the relatively small size of Kastle Limited, Mr.
Depending on the scale, operation, nature of business and risk profile of the licensed TCSP, the same person may be appointed as its CO and MLRO. Given the relatively small size of Kastle Limited, Mr. Li Man Lung has been appointed as both its CO and MLRO since October 19, 2022.
Substantially all of them have a bachelor’s degree or above. Our company is technology-focused, and our management team is technology-savvy. Most members of the management team participate in writing detailed program specifications for new applications. Our senior executives personally track progress on programming projects, which enables us to prioritize key initiatives and achieve rapid turn-around on new projects.
Our company is technology-focused, and our management team is technology-savvy. While a large number of members of the management team participate in writing detailed program specifications for new applications, and our senior executives personally track progress on programming projects, this enables us to prioritize key initiatives and achieve rapid turn-around on new projects.
On the other hand, company service encompasses the provision in Hong Kong, by way of business, of the service of (i) forming corporations or other legal persons; (ii) acting or arranging for another person to act as a director or a secretary of a corporation, as a partner of a partnership, or in a similar position in relation to other legal persons; and/or (iii) providing a registered office, business address, correspondence or administrative address for a corporation, a partnership or any other legal person or legal arrangement.
On the other hand, company service encompasses the provision in Hong Kong, by way of business, of the service of (i) forming corporations or other legal persons; (ii) acting or arranging for another person to act as a director or a secretary of a corporation, as a partner of a partnership, or in a similar position in relation to other legal persons; and/or (iii) providing a registered office, business address, correspondence or administrative address for a corporation, a partnership or any other legal person or legal arrangement. 104 Table of Contents The TCSP license is usually valid for a period of three years and renewable upon re-assessment of fit and proper requirements.
Our CRM system allows us to centrally monitor and supervise customer communications, manage relationships with customers, and analyze important customer data: • Customer communications .
CRM System Our CRM system is the core IT system for customer development and support. Our CRM system allows us to centrally monitor and supervise customer communications, manage relationships with customers, and analyze important customer data: • Customer communications .
For example, we have adopted a hybrid cloud infrastructure around the world, which allows us to retain flexibility while ensuring security, via a public cloud for conducting non-sensitive information and a private cloud for processing and storing business-critical data.
For example, we have adopted a hybrid cloud infrastructure around the world, which allows us to retain flexibility while ensuring security, via a public cloud for conducting non-sensitive information and a private cloud for processing and storing business-critical data. We will seek to partner with leading cloud service providers to maintain and enhance the agility of our technology infrastructure.
We manage operational risks by establishing policies and procedures to accomplish timely and efficient processing and obtaining periodic reports from management regarding key processes. Significant operational risks arise particularly in relation to trading, IT and finance functions. The potential risks relating to trading include routing errors, booking errors, product administration errors and exposure limit breaches.
We manage operational risks by establishing policies and procedures to accomplish timely and efficient processing and obtaining periodic reports from management regarding key processes. Significant operational risks arise particularly in relation to trading, IT and finance functions.
The commissions we charge generally vary in accordance with the type of products or services discussed above as well as timing of account activation, eligibility for discounts and other factors.
We adopt diversified pricing terms to better serve our customers with individualized needs. The commissions we charge generally vary in accordance with the type of products or services discussed above as well as timing of account activation, eligibility for discounts and other factors.
Going forward, the ESOP business may continue to seek new rounds of external equity financing, depending on market conditions and its business needs.
Going forward, the ESOP business may continue to seek new rounds of external equity financing, depending on market conditions and its business needs. We believe the financing will allow us to better serve our ESOP clients.
In the meantime, we also use TradeUP Securities, one of our subsidiaries with clearing license to execute and clear client trades and pay a pre-determined portion to corresponding clearing counterparties.
For consolidated accounts, we receive commission and pay a pre-determined portion to Interactive Brokers and other clearing partners as execution and clearing fees. In the meantime, we also use TradeUP Securities, one of our subsidiaries with clearing license to execute and clear client trades and pay a pre-determined portion to corresponding clearing counterparties.
No withholding tax or income tax is usually payable when dividends are paid between companies that are both New Zealand tax resident and members of the same wholly owned group of companies, or where a cash dividend with full imputation credits attached is paid to a non-resident who holds at least 10% direct ownership interest of the dividend paying company.
No withholding tax or income tax is usually payable when dividends are paid between companies that are both New Zealand tax resident and members of the same wholly owned group of companies, or where a cash dividend with full imputation credits attached is paid to a non-resident who holds at least 10% direct ownership interest of the dividend paying company. 105 Table of Contents The rate of tax imposed on taxpayers who are tax resident in a jurisdiction that New Zealand has entered into a double tax agreement with may have the rate of New Zealand tax, whether income tax or withholding tax, imposed on them reduced by the terms of that double tax agreement.
In November 2018, Tiger Brokers (NZ) Limited acquired 100% of the equity interests in Fleming Funds Management PTY Limited (“Fleming”), which was established in Australia in January 2006 and has been authorized as a licensed financial services provider in Australia since July 2006. 79 Table of Contents In September 2018, we established JV Uptech Holding Limited in BVI as a holding company to expand our business in Hong Kong.
In November 2018, Tiger Brokers (NZ) Limited acquired 100% of the equity interests in Fleming Funds Management PTY Limited (“Fleming”), which was established in Australia in January 2006 and has been authorized as a licensed financial services provider in Australia since July 2006.
We believe the financing will allow us to better serve our ESOP clients. 80 Table of Contents Our Corporate Information The locations of our principal executive offices are 1 Raffles Place, #35-61 One Raffles Place, Singapore (048616) and 18/F, Grandyvic Building, No. 1 Building, No. 16 Taiyanggong Middle Road, Chaoyang District, Beijing, 100020 PRC and our telephone number in China at this address is +86-10-56216660.
Our Corporate Information The locations of our principal executive offices are 1 Raffles Place, #35-61 One Raffles Place, Singapore (048616) and 18/F, Grandyvic Building, No. 1 Building, No. 16 Taiyanggong Middle Road, Chaoyang District, Beijing, 100020 PRC and our telephone number in China at this address is +86-10-56216660. Our registered office in the Cayman Islands is P.O.
We have developed a business continuity plan to manage and minimize the impact to the business in the event of operational disruptions. Backups and procedures are in place to facilitate the recovery of these systems at our recovery site overseas. See Item 4.B “Business Overview-Our Technology and Infrastructure-Back-end System” for more information.
Backups and procedures are in place to facilitate the recovery of these systems at our recovery site overseas. See Item 4.B “Business Overview-Our Technology and Infrastructure-Back-end System” for more information. We have additionally formulated a series of internal procedures focused on minimizing operational risks.
A reporting entity must establish, implement, and maintain an AML/CFT compliance programme that includes internal procedures, policies, and controls to detect money laundering and the financing of terrorism and to manage and mitigate the risk of money laundering and financing of terrorism.
The AML/CFT Act places obligations upon New Zealand’s reporting entities, including financial institutions to detect and deter money laundering and terrorist financing. 98 Table of Contents A reporting entity must establish, implement, and maintain an AML/CFT compliance programme that includes internal procedures, policies, and controls to detect money laundering and the financing of terrorism and to manage and mitigate the risk of money laundering and financing of terrorism.
Once our customers open accounts on our platform, they will be directed to link a payment method for making deposits into their accounts. We perform biweekly updates to our trading platform and had updated over 100 versions.
It generally takes less than five minutes to register and submit the application required to open an account on our platform. Once our customers open accounts on our platform, they will be directed to link a payment method for making deposits into their accounts. We perform biweekly updates to our trading platform and had updated over 150 versions.
Our New Zealand entity, Tiger Brokers (NZ) Limited, as a New Zealand financial institution, is required to annually report, with the coverage of the year ended March 31, the account and identity information to the New Zealand Inland Revenue Department, which will be exchanged with the person’s jurisdiction(s) of tax residence if New Zealand has an AEOI agreement to provide this information to that jurisdiction or those jurisdictions, and the information about certain individual accounts that the CRS refers to as being “undocumented accounts” where the institution has not been able to identify the person’s tax residency.
This will be exchanged with the person’s jurisdiction(s) of tax residence if New Zealand has an AEOI agreement to provide this information to that jurisdiction or those jurisdictions, and the information about certain individual accounts that the CRS refers to as being “undocumented accounts” where the institution has not been able to identify the person’s tax residency.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

72 edited+11 added−13 removed72 unchanged
Biggest changeFor the years ended December 31, 2020 2021 2022 US$ % US$ % US$ % (in thousands except for percentages) Consolidated Statements of Operations Data: Revenues: Commissions 77,629 56.1 147,199 55.7 108,118 48.0 Financing service fees 6,577 4.7 9,269 3.5 7,903 3.5 Interest income 31,754 22.9 70,335 26.6 85,150 37.8 Other revenues 22,537 16.3 37,685 14.2 24,195 10.7 Total revenues 138,497 100.0 264,488 100.0 225,366 100.0 Interest expense (10,102 ) (7.3 ) (18,379 ) (7.0 ) (18,669 ) (8.3 ) Total net revenues 128,395 92.7 246,109 93.1 206,697 91.7 Operating cost and expenses: ​ ​ Execution and clearing (12,645 ) (9.1 ) (31,144 ) (11.8 ) (15,608 ) (6.9 ) Employee compensation and benefits (including share-based compensation) (50,039 ) (36.1 ) (87,160 ) (33.0 ) (101,749 ) (45.1 ) Occupancy, depreciation and amortization (4,736 ) (3.4 ) (6,135 ) (2.3 ) (9,013 ) (4.0 ) Communication and market data (10,320 ) (7.5 ) (22,121 ) (8.4 ) (27,138 ) (12.0 ) Marketing and branding (15,872 ) (11.5 ) (59,265 ) (22.4 ) (33,122 ) (14.7 ) General and administrative (13,749 ) (9.9 ) (22,706 ) (8.6 ) (18,333 ) (8.2 ) Total operating cost and expenses (107,361 ) (77.5 ) (228,531 ) (86.5 ) (204,963 ) (90.9 ) Other income: 996 0.7 1,476 0.6 298 0.1 Income before income taxes 22,030 15.9 19,054 7.2 2,032 0.9 Income tax expenses (2,851 ) (2.1 ) (4,363 ) (1.6 ) (4,289 ) (1.9 ) Net (loss) income 19,179 13.8 14,691 5.6 (2,257 ) (1.0 ) Add non-GAAP adjustments ​ ​ Share-based compensation 6,055 4.4 13,370 5.1 14,214 6.3 Impairment loss from equity investments 151 0.1 600 0.2 648 0.3 Fair value change from convertible bonds — — (4,195 ) (1.6 ) — — Adjusted Non-GAAP Net income 25,385 18.3 24,466 9.3 12,605 5.6 For discussion of 2020 and 2021 results, refer to the disclosures set forth under the heading “Item 5.
Biggest changeThe table below also sets forth a reconciliation of adjusted net income (loss), a non-GAAP financial measure, to GAAP net income (loss). 115 Table of Contents For the years ended December 31, 2021 2022 2023 US$ % US$ % US$ % (in thousands except for percentages) Consolidated results of operations Revenues: Commissions 147,199 55.7 108,118 48.0 92,594 34.0 Financing service fees 9,269 3.5 7,903 3.5 12,179 4.4 Interest income 70,335 26.6 85,150 37.8 149,291 54.8 Other revenues 37,685 14.2 24,195 10.7 18,444 6.8 Total revenues 264,488 100.0 225,366 100.0 272,508 100.0 Interest expense (18,379 ) (7.0 ) (18,669 ) (8.3 ) (46,958 ) (17.2 ) Total net revenues 246,109 93.1 206,697 91.7 225,550 82.8 Operating cost and expenses: Execution and clearing (31,144 ) (11.8 ) (15,608 ) (6.9 ) (9,084 ) (3.3 ) Employee compensation and benefits (including share-based compensation) (87,160 ) (33.0 ) (101,749 ) (45.1 ) (100,751 ) (37.0 ) Occupancy, depreciation and amortization (6,135 ) (2.3 ) (9,013 ) (4.0 ) (9,387 ) (3.4 ) Communication and market data (22,121 ) (8.4 ) (27,138 ) (12.0 ) (30,831 ) (11.3 ) Marketing and branding (59,265 ) (22.4 ) (33,122 ) (14.7 ) (20,860 ) (7.7 ) General and administrative (22,706 ) (8.6 ) (18,333 ) (8.2 ) (21,791 ) (8.0 ) Total operating cost and expenses (228,531 ) (86.5 ) (204,963 ) (90.9 ) (192,704 ) (70.7 ) Other income: 1,476 0.6 298 0.1 13,148 4.8 Income before income taxes 19,054 7.2 2,032 0.9 45,994 16.9 Income tax expenses (4,363 ) (1.6 ) (4,289 ) (1.9 ) (12,987 ) (4.8 ) Net income (loss) 14,691 5.6 (2,257 ) (1.0 ) 33,007 12.1 Add non-GAAP adjustments Share-based compensation 13,370 5.1 14,214 6.3 10,147 3.7 Impairment loss from equity investments 600 0.2 648 0.3 — — Fair value change from convertible bonds (4,195 ) (1.6 ) — — — — Adjusted Non-GAAP Net income 24,466 9.3 12,605 5.6 43,154 15.8 For discussion of 2021 and 2022 results, refer to the disclosures set forth under the heading “Item 5.
Research and development, patents and licenses, etc. Our research and development expenses primarily consist of salaries and employee benefits, rental, and depreciation expenses related to the development of our proprietary trading platform, back-end technology and customer relationship management system.
C. Research and development, patents and licenses, etc. Our research and development expenses primarily consist of salaries and employee benefits, rental, and depreciation expenses related to the development of our proprietary trading platform, back-end technology and customer relationship management system.
We may seek to reduce the currency risk by entering into foreign currency instruments. We did not have any currency hedging instruments as of December 31, 2020, 2021 and 2022, however management monitors movements in exchange rates closely. Also see Item 3.D “Risk Factors” and Item 11 “Quantitative and Qualitative Disclosures About Market Risk.” B.
We may seek to reduce the currency risk by entering into foreign currency instruments. We did not have any currency hedging instruments as of December 31, 2021, 2022 and 2023, however management monitors movements in exchange rates closely. Also see Item 3.D “Risk Factors” and Item 11 “Quantitative and Qualitative Disclosures About Market Risk.” B.
Trend Information Please refer to our disclosures set forth under Item 3.D “Risk Factors,” Item 4 “Information on the Company,” and elsewhere in this Item 5 “Operating and Financial Review and Prospects” for information regarding the material risks, business developments and strategies, factors, and trends that are most likely to affect our business and results of operations through 2022. E.
Trend Information Please refer to our disclosures set forth under Item 3.D “Risk Factors,” Item 4 “Information on the Company,” and elsewhere in this Item 5 “Operating and Financial Review and Prospects” for information regarding the material risks, business developments and strategies, factors, and trends that are most likely to affect our business and results of operations through 2023. E.
GAAP and is not presented in accordance with U.S. GAAP. This non-GAAP financial measure has limitations as an analytical tool. One of the key limitations of using adjusted net loss or income is that they do not reflect all items of income and expense that affect our operations.
This non-GAAP financial measure is not defined under U.S. GAAP and is not presented in accordance with U.S. GAAP. This non-GAAP financial measure has limitations as an analytical tool. One of the key limitations of using adjusted net loss or income is that they do not reflect all items of income and expense that affect our operations.
Investing Activities Net cash used in investing activities in 2022 was US$3.6 million, consisting primarily of the purchase of term deposits and property, equipment and intangible assets of US$4.9 million, partially offset by maturity of term deposits.
Net cash used in investing activities in 2022 was US$3.6 million, consisting primarily of the purchase of property, equipment and intangible assets of US$4.9 million, partially offset by maturity of term deposits of US$2.1 million.
Net cash provided by investing activities in 2021 was US$10.9 million, consisting primarily of maturity of term deposits US$33.1 million partially offset by the purchase of term deposits and property, equipment and intangible assets.
Net cash provided by investing activities in 2021 was US$10.9 million, consisting primarily of maturity of term deposits US$33.1 million partially offset by the purchase of term deposits and property, equipment and intangible assets of US$22.4 million.
The difference was primarily attributable to (i)an increase of US$159.7 million in financial instruments held at fair value, (ii)an increase of US$77.2 million in receivables from brokers, dealers and clearing organizations resulting from an increase in our user base, and (iii)a decrease of US$32.2 million in payables to brokers, dealers and clearing organizations resulting from the decreased borrowed margin activities from brokers.
The difference was primarily attributable to (i) an increase of US$159.7 million in financial instruments held at fair value, (ii) an increase of US$77.2 million in receivables from brokers, dealers and clearing organizations resulting from an increase in our user base, and (iii) a decrease of US$32.2 million in payables to brokers, dealers and 119 Table of Contents clearing organizations resulting from the decreased borrowed margin activities from brokers.
As a result, if factors change and different assumptions are used, share-based compensation expense could be significantly different from what we recorded in the current period. 121 Table of Contents
As a result, if factors change and different assumptions are used, share-based compensation expense could be significantly different from what we recorded in the current period. 122 Table of Contents
Financing service fees Financing service fees include fees Interactive Brokers paid to us regarding the margin financing and securities borrowing and lending activities provided by Interactive Brokers to our fully disclosed account customers for 110 Table of Contents trading purposes. We generally charge a specific rate above the interest rate of the margin loan or funding from the clearing agents.
Financing service fees Financing service fees include fees Interactive Brokers paid to us regarding the margin financing and securities borrowing and lending activities provided by Interactive Brokers to our fully disclosed account customers for trading purposes. We generally charge a specific rate above the interest rate of the margin loan or funding from the clearing agents.
For Tiger Brokers SG, the minimum base capital requirement is SGD 1 million and, in addition, the firm is required to analyze its operational risk and determine further capital requirement according to the risk the business faces.
For Tiger Brokers SG, the minimum base capital requirement is SGD 5 million and, in addition, the firm is required to analyze its operational risk and determine further capital requirement according to the risk the business faces.
The board must not authorize a dividend in respect of some but not all the shares in a class, or that is of a greater value per share in respect of some shares of a class than it is in respect of other shares of that class, unless the amount of the dividend in respect of a share of that class is in proportion to the amount paid to the company in satisfaction of the liability of the shareholder under the subsidiary’s constitution or under the terms of issue of the share or is required, for a portfolio tax rate entity, as a result of sub-part HM of the Income Tax Act 2007. 120 Table of Contents C.
The board must not authorize a dividend in respect of some but not all the shares in a class, or that is of a greater value per share in respect of some shares of a class than it is in respect of other shares of that class, unless the amount of the dividend in respect of a share of that class is in proportion to the amount paid to the company in satisfaction of the liability of the shareholder under the subsidiary’s constitution or under the terms of issue of the share or is required, for a portfolio tax rate entity, as a result of sub-part HM of the Income Tax Act 2007.
Our employee compensation and benefits expenses also include salaries, wages, bonuses and other benefits we pay to employees who are in our research and development department, which represent substantially all of our research and development expenses.
Employee compensation and benefits Employee compensation and benefits expenses include salaries, wages, bonuses, share-based compensation and other benefits for all employees. Our employee compensation and benefits expenses also include salaries, wages, bonuses and other benefits we pay to employees who are in our research and development department, which represent substantially all of our research and development expenses.
Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this annual report, including in Item 5.G. “Safe Harbor”, Item 3. “Key Information – Certain Risks Related to Our Chinese Operations and Operating Structure”, and Item 3.D.
Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this annual report, including in “Item 5.G. Safe Harbor”, “Item 3. Key Information – Certain Risks Related to Our Chinese Operations and Operating Structure”, and “ Item 3.D.
In 2020, 2021 and 2022, the average rate of commissions over trading volume was 0.0354%, 0.0364% and 0.0335%, respectively, which is the ratio of the total commissions to the total trading volume in the same period.
In 2021, 2022 and 2023, the average rate of commissions over trading volume was 0.0364%, 0.0335% and 0.0315%, respectively, which is the ratio of the total commissions to the total trading volume in the same period.
There were no costs due to cybersecurity incidents in 2022, nor was there any impact of cybersecurity incidents on our reportable segments. 112 Table of Contents Taxation Cayman Islands We are not subject to income or capital gains tax under the current laws of the Cayman Islands.
There were no costs due to cybersecurity incidents in 2021, 2022 and 2023, nor was there any impact of cybersecurity incidents on our reportable segments. Taxation Cayman Islands We are not subject to income or capital gains tax under the current laws of the Cayman Islands.
Adjusted net loss or income enables our management to assess our operating results without considering the impact of share-based compensation, impairment loss from equity investments and fair value change from convertible bonds. We also believe that the use of this non-GAAP financial measure facilitate investors’ assessment of our operating performance. This non-GAAP financial measure is not defined under U.S.
Adjusted net loss or income enables our management to assess our 114 Table of Contents operating results without considering the impact of share-based compensation, impairment loss from equity investments and fair value change from convertible bonds. We also believe that the use of this non-GAAP financial measure facilitate investors’ assessment of our operating performance.
For the years ended December 31, 2020, 2021 and 2022, US$22.5 million, US$47.8million and US$60.1 million of research and development costs have been expensed as incurred as the costs qualifying for capitalization have been insignificant. D.
For the years ended December 31, 2021, 2022 and 2023, US$47.8 million, US$60.1 million and US$63.5 million of research and development costs have been expensed as incurred as the costs qualifying for capitalization have been insignificant. D.
In 2020, 2021 and 2022, the average annualized rate of financing service fees over the average balance of the margin loans provided by the clearing agents was 0.47%, 0.67% and 1.65%, respectively. The increase between 2021 and 2022 was primarily due to increasing federal benchmark rates in 2022.
In 2021, 2022 and 2023, the average annualized rate of financing service fees over the average balance of the margin loans provided by the clearing agents was 0.67%, 1.65% and 3.18%, respectively. The increase of financing service fees in 2023 compared with 2022 was primarily due to increasing federal benchmark rates in 2023.
Singapore Our subsidiaries incorporated in Singapore are subject to an income tax rate of 17% for taxable income earned in Singapore. Singapore does not impose a withholding tax on dividends for resident companies. Australia Our subsidiaries located in Australia and are subject to an income tax rate of 27.5% for taxable income earned in Australia.
Singapore Our subsidiaries incorporated in Singapore are subject to an income tax rate of 17% for taxable income earned in Singapore. Singapore does not impose a withholding tax on dividends for resident companies. Australia 113 Table of Contents Our subsidiaries located in Australia are subject to an income tax rate of 30% for taxable income earned in Australia.
In 2020, 2021 and 2022, the average annualized rate of our margin financing and our securities borrowing and lending activities provided by us to the consolidated account customers on our platform was 8.98%, 5.97% and 6.86%, respectively. The increase between 2021 and 2022 was primarily due to the increasing federal benchmark rate in 2022.
In 2021, 2022 and 2023, the average annualized rate of our margin financing and our securities borrowing and lending activities provided by us to the consolidated account customers on our platform was 5.97%, 6.86% and 8.16%, respectively. The increase of interest income in 2023 compared with 2022 was primarily due to the increasing federal benchmark rates in 2023.
For fully disclosed accounts, every time Interactive Brokers executes and clears a trade, it collects the commissions, deducts a certain portion as execution and clearing fees and returns the rest of the commissions to us.
For consolidated accounts, we receive commissions from customers and pay the execution and clearing fees to our clearing agents. For fully disclosed accounts, every time Interactive Brokers executes and clears a trade, it collects the commissions, deducts a certain portion as execution and clearing fees and returns the rest of the commissions to us.
There are no other taxes likely to be material to us levied by the government of the BVI. New Zealand Our subsidiaries incorporated in New Zealand are subject to an income tax rate of 28% for taxable income earned in New Zealand. New Zealand does not impose a withholding tax on dividends for resident companies.
There are no other taxes likely to be material to us levied by the government of the BVI. New Zealand Our subsidiaries incorporated in New Zealand are subject to an income tax rate of 28% for taxable income earned in New Zealand.
Operating Cost and Expenses The following table sets forth our operating cost and expenses, both in absolute amount and as a percentage of total revenues, for the years indicated: ​ For the years ended December 31,​ ​ 2020 2021 2022 ​ US$ % US$ % US$ % ​ (in thousands except for percentages)​ Execution and clearing 12,645 9.1 31,144 11.8 15,608 6.9 Employee compensation and benefits (including share-based compensation) 50,039 36.1 87,160 33.0 101,749 45.1 Occupancy, depreciation and amortization 4,736 3.4 6,135 2.3 9,013 4.0 Communication and market data 10,320 7.5 22,121 8.4 27,138 12.0 Marketing and branding 15,872 11.5 59,265 22.4 33,122 14.7 General and administrative 13,749 9.9 22,706 8.6 18,333 8.2 Total operating cost and expenses 107,361 77.5 228,531 86.5 204,963 90.9 Execution and clearing Execution and clearing expenses primarily include the fees we pay to clearing agents to execute and clear trades.
Operating Cost and Expenses The following table sets forth our operating cost and expenses, both in absolute amount and as a percentage of total revenues, for the years indicated: ​ For the years ended December 31,​ ​ 2021 2022 2023 ​ US$ % US$ % US$ % ​ (in thousands except for percentages)​ Execution and clearing 31,144 11.8 15,608 6.9 9,084 3.3 Employee compensation and benefits (including share-based compensation) 87,160 33.0 101,749 45.1 100,751 37.0 Occupancy, depreciation and amortization 6,135 2.3 9,013 4.0 9,387 3.4 Communication and market data 22,121 8.4 27,138 12.0 30,831 11.3 Marketing and branding 59,265 22.4 33,122 14.7 20,860 7.7 General and administrative 22,706 8.6 18,333 8.2 21,791 8.0 Total operating cost and expenses 228,531 86.5 204,963 90.9 192,704 70.7 111 Table of Contents Execution and clearing Execution and clearing expenses primarily include the fees we pay to clearing agents to execute and clear trades.
In addition, the EIT Law and its implementing rules permit qualified “State-encouraged High-new Technologies Company,” or the HNTE, to enjoy a reduced 15% EIT rate.
In addition, the EIT Law and its implementing rules permit qualified “State-encouraged High-new Technologies Company,” or the HNTE, to enjoy a reduced 15% EIT rate. The HNTE certificate is effective for a period of three years.
The following table sets forth the breakdown of our total revenues, both in absolute amount and as a percentage of our total revenues, for the years indicated: ​ For the years ended December 31,​ ​ 2020 2021 2022 ​ US$ % US$ % US$ % ​ (in thousands except for percentages)​ Revenues: ​ ​ ​ ​ ​ Commissions 77,629 56.1 147,199 55.7 108,118 48.0 Financing service fees 6,577 4.7 9,269 3.5 7,903 3.5 Interest income 31,754 22.9 70,335 26.6 85,150 37.8 Other revenues 22,537 16.3 37,685 14.2 24,195 10.7 Total revenues 138,497 100.0 264,488 100.0 225,366 100.0 Interest expense (10,102 ) (7.3 ) (18,379 ) (6.9 ) (18,669 ) (8.3 ) Total net revenues 128,395 92.7 246,109 93.1 206,697 91.7 Commissions We earn commissions from the brokerage services we deliver for customers’ fully disclosed accounts and consolidated accounts.
The following table sets forth the breakdown of our total revenues, both in absolute amount and as a percentage of our total revenues, for the years indicated: ​ For the years ended December 31,​ ​ 2021 2022 2023 ​ US$ % US$ % US$ % ​ (in thousands except for percentages)​ Revenues: ​ ​ ​ ​ ​ Commissions 147,199 55.7 108,118 48.0 92,594 34.0 Financing service fees 9,269 3.5 7,903 3.5 12,179 4.4 Interest income 70,335 26.6 85,150 37.8 149,291 54.8 Other revenues 37,685 14.2 24,195 10.7 18,444 6.8 Total revenues 264,488 100.0 225,366 100.0 272,508 100.0 Interest expense (18,379 ) (6.9 ) (18,669 ) (8.3 ) (46,958 ) (17.2 ) Total net revenues 246,109 93.1 206,697 91.7 225,550 82.8 Commissions We earn commissions from the brokerage services we deliver for customers’ fully disclosed accounts and consolidated accounts.
As a result, UP Fintech’s ability to pay dividends may depend upon dividends paid by our PRC and New Zealand subsidiaries. If our existing PRC or New Zealand subsidiaries or any newly formed ones incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us.
If our existing PRC or New Zealand subsidiaries or any newly formed ones incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us.
Our total revenues were US$138.5 million, US$264.5 million and US$225.4 million in 2020, 2021 and 2022, respectively. We generated net 108 Table of Contents income of US$19.2 million and US$14.7 million in 2020 and 2021, respectively, and recorded net losses of US$2.3 million in 2022.
Our total revenues were US$264.5 million, US$225.4 million and US$272.5 million in 2021, 2022 and 2023, respectively. We generated net income of US$14.7 million and US$33.0 million in 2021 and 2023, respectively, and recorded net losses of US$2.3 million in 2022.
In addition, the VIEs and VIEs’ subsidiaries are subject to value-added taxes, or VAT, on the services they provide at the rate of 6% or 3%, depending on whether the entity is a general taxpayer or small-scale taxpayer, plus related surcharges, less any deductible VAT they have already paid or borne.
In addition, most of our PRC subsidiaries, the VIEs and VIEs’ subsidiaries are subject to value-added taxes, or VAT, on the services they provide at the rate of 6%, plus related surcharges, less any deductible VAT they have already paid or borne.
Cash flows The following table sets forth a summary of our cash flows for the periods presented: For the years ended December 31, 2020 2021 2022 US$ (in thousands) Summary Consolidated Statement of Cash Flows Data: Net cash provided by operating activities 535,281 413,204 258,061 Net cash provided by (used in) investing activities 43,556 10,919 (3,612 ) Net cash (used in) provided by financing activities (8,366 ) 330,881 4,730 Increase in cash and cash equivalents and restricted cash 570,471 755,004 259,179 Effect of exchange rate changes (195 ) (1,719 ) (4,335 ) Cash, cash equivalents and restricted cash at beginning of the year 377,324 947,600 1,700,885 Cash, cash equivalents and restricted cash at end of the year 947,600 1,700,885 1,955,729 118 Table of Contents Operating Activities Net cash provided by operating activities in 2022 was US$258.1 million, as compared to net loss of US$2.3 million in 2022.
Cash flows The following table sets forth a summary of our cash flows for the periods presented: For the years ended December 31, 2021 2022 2023 US$ (in thousands) Summary Consolidated Statement of Cash Flows Data: Net cash provided by (used in) operating activities 413,204 258,061 (6,566 ) Net cash provided by (used in) investing activities 10,919 (3,612 ) (7,751 ) Net cash provided by financing activities 330,881 4,730 1,820 Increase (decrease) in cash and cash equivalents and restricted cash 755,004 259,179 (12,497 ) Effect of exchange rate changes (1,719 ) (4,335 ) (3,478 ) Cash, cash equivalents and restricted cash at beginning of the year 947,600 1,700,885 1,955,729 Cash, cash equivalents and restricted cash at end of the year 1,700,885 1,955,729 1,939,754 Operating Activities Net cash used in operating activities in 2023 was US$6.6 million, as compared to net income of US$33.0 million in 2023.
Foreign Currency Fluctuations Substantially all of our revenues are denominated in U.S. dollars and Hong Kong dollars and our expenses are denominated in Renminbi and U.S. dollars. We have not used any derivative financial instruments to hedge exposure to such risk.
See “Non-GAAP Financial Measure” for more information. See Item 5.A “Operating Results - Non-GAAP Reconciliations.” Foreign Currency Fluctuations Substantially all of our revenues are denominated in U.S. dollars and Hong Kong dollars and our expenses are denominated in Renminbi and U.S. dollars. We have not used any derivative financial instruments to hedge exposure to such risk.
This non-GAAP financial measure presented here may not be comparable to similarly titled measure presented by other companies. Other companies may calculate similarly titled measure differently, limiting the usefulness of such measure when analyzing our data comparatively.
This non-GAAP financial measure presented here may not be comparable to similarly titled measure presented by other companies. Other companies may calculate similarly titled measure differently, limiting the usefulness of such measure when analyzing our data comparatively. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure.
General and administrative General and administrative expenses primarily consist of intermediary service expenses, travelling expenses, business entertainment expenses and miscellaneous expenses relating to our facilities and other administrative expenses. Intermediary service fees primarily consist of fees we pay our professional service providers including our lawyers, accountants and consultants.
General and administrative General and administrative expenses primarily consist of intermediary service expenses, travelling expenses, business entertainment expenses and miscellaneous expenses relating to our facilities and other administrative expenses.
Net cash provided by operating activities in 2020 was US$535.3 million, as compared to net income of US$19.2 million in 2020.
Net cash provided by operating activities in 2022 was US$258.1 million, as compared to net loss of US$2.3 million in 2022.
However, we cannot guarantee that we will be successful in growing our customer base or our operations on our desired timeline or at all. 109 Table of Contents Additionally, capital markets worldwide may remain volatile or increase in volatility in the coming year due to continued tightening of monetary policy by central banks, increased market interest rates, the prospect or perception of recession or inflation, geopolitical factors such as the war in Ukraine, and other macroeconomic factors.
Additionally, capital markets worldwide may remain volatile or increase in volatility in the coming year due to continued tightening of monetary policy by central banks, increased market interest rates, the prospect or perception of recession or inflation, geopolitical factors such as the war in Ukraine, and other macroeconomic factors.
We believe that customers from new markets and customers interested in new services will increase demand for our products and services and, consequentially, may turn these markets and/or products into growth drivers in future years.
We believe that customers from new markets and customers interested in new services will increase demand for our products and services and, consequentially, may turn these markets and/or products into growth drivers in future years. However, we cannot guarantee that we will be successful in growing our customer base or our operations on our desired timeline or at all.
Its financial resources (which definition includes its base capital) cannot fall below its total risk requirement (i.e., the amount required to address risks arising from its activities), and in the case that its financial resources fall below 120% of its total risk requirement, it is required to immediately notify the MAS of this fact. 117 Table of Contents To date, we have financed our operating and investing activities through net proceeds from our securities offerings, cash generated from operating activities and historical equity financing activities.
Its financial resources (which definition includes its base capital) cannot fall below its total risk requirement (i.e., the amount required to address risks arising from its activities), and in the case that its financial resources fall below 120% of its total risk requirement, it is required to immediately notify the MAS of this fact.
In addition, the laws, regulations and governmental policies of various jurisdictions may impact our operations, including New Zealand, U.S., PRC, Singapore, Australia and Hong Kong laws and regulations. See Item 4.B “Business Overview” for a summary of the principal applicable laws which may affect our business.
In addition, the laws, regulations and governmental policies of various jurisdictions may impact our operations, including New Zealand, U.S., PRC, Singapore, Australia and Hong Kong laws and regulations.
Income before income taxes The following table sets forth our income before income taxes, both in absolute amount and as a percentage of our total revenues, for the years indicated. ​ For the years ended December 31,​ ​ 2020 2021 2022 ​ US$ % US$ % US$ % ​ (in thousands except for percentages)​ Total revenues 138,497 100.0 264,488 100.0 225,366 100.0 Interest expense (10,102 ) (7.3 ) (18,379 ) (6.9 ) (18,669 ) (8.3 ) Total net revenues 128,395 92.7 246,109 93.1 206,697 91.7 Total operating cost and expenses (107,361 ) (77.5 ) (228,531 ) (86.5 ) (204,963 ) (90.9 ) Other income 996 0.7 1,476 0.6 298 0.1 Income before income taxes 22,030 15.9 19,054 7.2 2,032 0.9 Cybersecurity For the years ended December 31, 2022, US$0.4 million of cybersecurity mitigation costs have been expensed (excluding labor costs).
Intermediary service fees primarily consist of fees we pay our professional service providers including our lawyers, accountants and consultants. 112 Table of Contents Income before income taxes The following table sets forth our income before income taxes, both in absolute amount and as a percentage of our total revenues, for the years indicated. ​ For the years ended December 31,​ ​ 2021 2022 2023 ​ US$ % US$ % US$ % ​ (in thousands except for percentages)​ Total revenues 264,488 100.0 225,366 100.0 272,508 100.0 Interest expense (18,379 ) (6.9 ) (18,669 ) (8.3 ) (46,958 ) (17.2 ) Total net revenues 246,109 93.1 206,697 91.7 225,550 82.8 Total operating cost and expenses (228,531 ) (86.5 ) (204,963 ) (90.9 ) (192,704 ) (70.7 ) Other income 1,476 0.6 298 0.1 13,148 4.8 Income before income taxes 19,054 7.2 2,032 0.9 45,994 16.9 Cybersecurity For the years ended December 31, 2021, 2022 and 2023, US$0.4 million, US$0.4 million and US$0.6 million of cybersecurity mitigation costs have been expensed (excluding labor costs), respectively.
We base our estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ.
We base our estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying 121 Table of Contents values of assets and liabilities.
Hong Kong Our subsidiaries incorporated in Hong Kong were subject to Hong Kong profits tax at a rate of 16.5% for taxable income earned in Hong Kong before April 1, 2018.
Dividends between members of the same wholly owned group are exempt income and therefore are not subject to withholding tax rules. Hong Kong Our subsidiaries incorporated in Hong Kong were subject to Hong Kong profits tax at a rate of 16.5% for taxable income earned in Hong Kong before April 1, 2018.
Execution and clearing expenses were US$15.6 million in 2022, a decrease of 49.9% from US$31.1 million in 2021. This decrease was primarily due to more self-clearing of US cash equities and options. Employee compensation and benefits.
Execution and clearing expenses were US$9.1 million in 2023, a decrease of 41.8% from US$15.6 million in 2022. This decrease was primarily due to more self-clearing of US and HK equities and lower trading volume. Employee compensation and benefits. Employee compensation and benefits expenses were US$100.8 million in 2023, a slight decrease of 1.0% from US$101.7 million in 2022.
We have entered into various off-balance sheet arrangements in the ordinary course of business, primarily to meet the needs of our clients. These arrangements include the margin financing and borrowing agreements.
We cannot assure you that financing will be available in amounts or on terms acceptable to us, or at all. 118 Table of Contents We have entered into various off-balance sheet arrangements in the ordinary course of business, primarily to meet the needs of our clients. These arrangements include the margin financing and borrowing agreements.
Operating and Financial Review and Prospects – A. Operating Results” in our Annual Report on Form 20-F available on the internet site maintained by the SEC at www.sec.gov. Year ended December 31, 2022 compared with year ended December 31, 2021 Revenues Total revenues decreased by 14.8% from US$264.5 million in 2021 to US$225.4 million in 2022.
Operating and Financial Review and Prospects – A. Operating Results” in our Annual Report on Form 20-F for the year ended December 31, 2022, filed with the SEC on April 26, 2023 and available on the internet site maintained by the SEC at www.sec.gov.
“Risk Factors.” Overview We are a leading integrated financial technology platform providing cross-market, multi-product investment experience for investors around the world. Our proprietary trading platform enables investors to trade in equities and other financial instruments on multiple exchanges around the world.
Risk Factors.” Overview We are a leading integrated financial technology platform providing cross-market, multi-product investment experience for investors around the world.
Occupancy, depreciation and amortization expenses were US$9.0 million in 2022, an increase of 46.9% from US$6.1 million in 2021, due to an increase in overseas office space and relevant leasehold improvements. Communication and market data. Communication and market data expenses were US$27.1 million in 2022, an increase of 22.7% from US$22.1 million in 2021.
Occupancy, depreciation and amortization. Occupancy, depreciation and amortization expenses were US$9.4 million in 2023, an increase of 4.1% from US$9.0 million in 2022, due to increased rent. Communication and market data. Communication and market data expenses were US$30.8 million in 2023, an increase of 13.6% from US$27.1 million in 2022.
Net income Net loss was US$2.3 million in 2022, as compared to a net income of US$14.7 million in 2021. Adjusted net income, which excluded share-based compensation, fair value change from convertible bonds and impairment loss from equity investments, was US$12.6 million in 2022, as compared to US$24.5 million in 2021. See “Non-GAAP Financial Measure” for more information.
Net income As a result of the foregoing, our net income was US$33.0 million in 2023, as compared to a net loss of US$2.3 million in 2022. 117 Table of Contents Adjusted net income, which excluded share-based compensation, fair value change from convertible bonds and impairment loss from equity investments, was US$43.2 million in 2023, as compared to US$12.6 million in 2022.
We offer comprehensive brokerage services through our integrated single-account structure, which empowers users in trade execution, margin financing and securities lending across different global markets. We also provide value-added services, such as investor education, community engagement and IR platform, all within a few taps or clicks through APP on smartphone, tablet and PC terminals.
We also provide value-added services, such as investor education, community engagement and IR platform, all within a few taps or clicks through APP on smartphone, tablet and PC terminals.
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.
Risk Factors.” See Note 2 to our consolidated financial statements for the year ended December 31, 2023 for more information on our significant accounting policies. 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.
This decrease was primarily driven by decreases of US$39.1 million in commissions. Commissions. Commissions were US$108.1 million in 2022, a 26.5% decrease from US$147.2 million in 2021, driven by decrease in trading volume and market activities. Our trading volume decreased from US$404.3 billion in 2021 to US$323.2 billion in 2022. 115 Table of Contents Financing service fees.
Commissions were US$92.6 million in 2023, a 14.4% decrease from US$108.1 million in 2022, driven by a decrease in trading volume and market activities. Our trading volume decreased from US$323.2 billion in 2022 to US$294.2 billion in 2023. Financing service fees.
Operating cost and expenses Total operating cost and expenses decreased by 10.3% from US$228.5 million in 2021 to US$205.0 million in 2022, due to decreases in marketing and branding expense, execution and clearing expense, and offset by increase in employee compensation and benefits expenses. Execution and clearing.
Operating cost and expenses Total operating cost and expenses decreased by 6.0% from US$205.0 million in 2022 to US$192.7 million in 2023, due to decreases in marketing and branding expense and execution and clearing expense, partially offset by increases in communication and market data expenses. Execution and clearing.
Pursuant to the agreement with our primary clearing agent, Interactive Brokers, we receive a portion of commission fees paid by our customers every time Interactive Brokers executes and clears a trade order. For consolidated accounts, we receive commissions from customers and pay the execution and clearing fees to our clearing agents.
The decrease in the average commission rates was primarily due to the lower commissions resulting from the decreased trading volume in the past two years. 110 Table of Contents Pursuant to the agreement with our primary clearing agent, Interactive Brokers, we receive a portion of commission fees paid by our customers every time Interactive Brokers executes and clears a trade order.
Interest income was US$85.2 million in 2022, up 21.1% from US$70.3 million in 2021. This was primarily due to increased interest rates and the increase in interest income from bank deposits. Interest income from margin financing activities increased by 26.7% from US$29.0 million in 2021 to US$36.8 million in 2022, which was mainly attributable to the increased interest rates.
This was primarily due to increased interest rates and the increase in interest income from bank deposits. Interest income from securities lending activities increased by 74.1% from US$39.5 million in 2022 to US$68.7 million in 2023, which was mainly attributable to increased interest rates.
United States Our subsidiaries incorporated in the United States are subject to a federal income tax rate of 21% for taxable income earned in the USA.
United States Our subsidiaries incorporated in the United States are subject to a federal income tax rate of 21% for taxable income earned in the USA. Taxable income apportioned to New York, New York City, and New Jersey is also subject to tax at statutory tax rates of 6.5%, 8.85%, and 11.5%, respectively.
Net cash provided by investing activities in 2020 was US$43.6 million, consisting primarily of maturity of term deposits US$78.4 million partially offset by the purchase of term deposits and loans to employees. Financing Activities Net cash provided by financing activities in 2022 was US$4.7 million, consisting primarily of net proceeds of US$4.4 million received from redeemable non-controlling interests.
Financing Activities Net cash provided by financing activities in 2023 was US$1.8 million, consisting primarily of proceeds of US$1.7 million received from redeemable non-controlling interests. Net cash provided by financing activities in 2022 was US$4.7 million, consisting primarily of proceeds of US$4.4 million received from redeemable non-controlling interests.
The Company is exposed to the risks and complexities inherent in doing business in international markets, some of which, such as those associated with an uncertain regulatory environment, are particularly acute in China.
See Item 4.B “Business Overview” for a summary of the principal applicable laws which may affect our business. 109 Table of Contents The Company is exposed to the risks and complexities inherent in doing business in international markets, some of which, such as those associated with an uncertain regulatory environment.
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, or at all.
The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that would restrict our operations.
This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report. The operating results in any period are not necessarily indicative of the results that may be expected for any future period.
The operating results in any period are not necessarily indicative of the results that may be expected for any future period.
Capital Expenditures Our capital expenditures were primarily incurred for purchases of servers, equipment and software. Historically, the amount of our capital expenditures has been small. Our capital expenditures were US$1.0 million, US$5.0 million and US$4.9 million in 2020, 2021 and 2022, respectively. We intend to fund our future capital expenditures with our existing cash balance.
Our capital expenditures were US$5.0 million, US$4.9 million and US$2.8 million in 2021, 2022 and 2023, respectively. We intend to fund our future capital expenditures with our existing cash balance. We will continue to incur capital expenditures as needed to meet the expected growth of our business.
Net cash provided by financing activities in 2021 was US$330.9 million, consisting primarily of net proceeds of US$175.4 from follow-on public offering and proceeds of US$154.9 million from issuance of convertible bonds. 119 Table of Contents Net cash used in financing activities in 2020 was US$8.4 million, consisting primarily of US$10.5 million in payment to redeemable non-controlling interest due to the disposal of our sponsored fund.
Net cash provided by financing activities in 2021 was US$330.9 million, consisting primarily of net proceeds of US$175.4 from follow-on public offering and proceeds of US$154.9 million from issuance of convertible bonds. Capital Expenditures Our capital expenditures were primarily incurred for purchases of servers, equipment and software. Historically, the amount of our capital expenditures has been small.
Financing service fees from securities lending activities decreased by 49.7% from US$1.8 million in 2021 to US$0.9 million in 2022, which was mainly attributable to the decrease in daily average securities lending balance by 27.1% from US$103.7 million in 2021 to US$75.5 million in 2022. Interest income.
Financing service fees from securities lending activities increased by 19.0% from US$0.9 million in 2022 to US$1.1 million in 2023, which was mainly attributable to the increased interest rate. 116 Table of Contents Interest income. Interest income was US$149.3 million in 2023, up 75.3% from US$85.2 million in 2022.
We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure. 114 Table of Contents Results of Operations The following table sets forth a summary of our consolidated results of operations for the period indicated, both in absolute amounts and as percentages of our total revenues.
Results of Operations The following table sets forth a summary of our consolidated results of operations for the period indicated, both in absolute amounts and as percentages of our total revenues. This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report.
The decrease was primarily due to the decrease in commissions and other revenues of total revenues in 2022. 116 Table of Contents Income tax expense We had income tax expense of US$4.3 million in 2022, compared with income tax expense of US$4.4 million in 2021.
Income tax expense We had income tax expense of US$13.0 million in 2023, compared with income tax expense of US$4.3 million in 2022, primarily due to the 2163.7% year-over-year increase in our income before income tax expense.
This was positively impacted by (i) an increase of US$1,183.7 million in amounts payables to customers(ii) an increase of US$168.6 million in payables to brokers, dealers and clearing organizations,(iii) a decrease of US$14.3 million in financial instruments held at fair value.(iv) an increase of US$10.3 million in accrued expenses and other current liabilities due to the increased payroll and welfare, tax payables, and marketing and professional expenses in connection with the expansion of our business, and (v) the US$6.1 million recognized share-based compensation expenses resulting from the options granted to the management and employees.
This was positively impacted by (i) a decrease of US$415.1 million in receivables from brokers, dealers and clearing organizations resulting from the weaker global capital markets and (ii) the US$10.1 million recognized share-based compensation expenses resulting from the options granted to the management and employees.
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, 2022 for more information on our significant accounting policies.
Changes in the economic environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ. 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.
Interest expense was US$18.7 million, an increase of 1.6% from US$18.4 million in 2021 due to increased interest rates offsetting cost savings from self-clearing and a slowdown of Hong Kong IPO financing.
Interest expense was US$47.0 million, an increase of 151.5% from US$18.7 million in 2022 due to increased interest rates.
Financing service fees from margin financing activities decreased by 6.0% from US$7.5 million in 2021 to US$7.0 million in 2022, which was mainly attributable to the decrease in daily average margin financing balance by 70.0% from US$1,347.5 million in 2021 to US$404.8 million in 2022.
Financing service fees were US$12.2 million in 2023, an increase of 54.1% from US$7.9 million in 2022, primarily due to increased interest rates. Financing service fees from margin financing activities increased by 58.8% from US$7.0 million in 2022 to US$11.1 million in 2023, which was mainly attributable to the increased interest rate.
We will continue to incur capital expenditures as needed to meet the expected growth of our business. Holding Company Structure UP Fintech is a holding company with no material operations of its own. We conduct our operations primarily through our New Zealand subsidiaries, U.S. subsidiaries, Singapore subsidiaries, and the VIEs and their respective subsidiaries in China.
We conduct our operations primarily through our New Zealand subsidiaries, U.S. subsidiaries, Singapore subsidiaries, and the VIEs and their respective subsidiaries in China. 120 Table of Contents As a result, UP Fintech’s ability to pay dividends may depend upon dividends paid by our PRC and New Zealand subsidiaries.
As we slowed down marketing campaign due to weaker market backdrop. General and administrative. General and administrative expenses were US$18.3 million in 2022, a decrease of 19.3% from US$22.7 million in 2021. This decrease was primarily due to professional service fee and consulting expense resulting from business expansion occurred in last year.
General and administrative expenses were US$21.8 million in 2023, an increase of 18.9% from US$18.3 million in 2022. This increase was primarily due to higher expense related to professional service fee and consulting expense in 2023. Income before income taxes We had a profit before income taxes of US$46.0 million in 2023, compared with US$2.0 million in 2022.
Other revenues. Other revenues were US$24.2 million in 2022, a decrease of 35.8% from US$37.7 million in 2021. The decrease was primarily due to the slowdown in underwriting related business and currency exchange service. Interest expense.
Interest income from margin financing activities increased by 42.3% from US$36.8 million in 2022 to US$52.3 million in 2023, which was mainly attributable to increased interest rates. Other revenues. Other revenues were US$18.4 million in 2023, a decrease of 23.8% from US$24.2 million in 2022. The decrease was primarily due to the decrease in IPO distribution incomes. Interest expense.
Hangzhou U-Tiger, Guangzhou U Tiger and Beijing Xiangshang were qualified as HNTE under the EIT Law on December 24, 2022, December 22, 2022 and December 30, 2022, 113 Table of Contents respectively, subject to the tax rate of 15% with a valid period of three years, ending on December 31, 2024.Our other subsidiaries, VIEs and VIEs’ subsidiaries incorporated in China are subject to income tax rate of 25%, according to EIT Law.
Certain PRC subsidiaries, VIEs and VIEs’ subsidiaries, including Beijing U-Tiger Business, Beijing Yixin and Beijing U-Tiger Network, are qualified HNTEs and enjoy a reduced income tax rate of 15% for the three years presented, and Hangzhou U-Tiger, Guangzhou U Tiger and Beijing Xiangshang are qualified HNTEs and enjoy a reduced income tax rate of 15% for the years ended December 31, 2022 and 2023.
As of December 31, 2020, 2021 and 2022, our cash and cash equivalents were US$79.7 million, US$269.1 million and US$277.7 million, respectively.
To date, we have financed our operating and investing activities through net proceeds from our securities offerings, cash generated from operating activities and historical equity financing activities. As of December 31, 2022 and 2023, our cash and cash equivalents were US$277.7 million and US$322.6 million, respectively.
Removed
The gradual increase in the average commission rates was primarily caused by our product diversification as the portion of higher commission product increased in the year 2021 and the average commission rates decrease between 2021 and 2022 was primarily due to the lower commissions resulting from the decreased trading volume in 2022.
Added
Our proprietary trading platform enables investors to trade in equities and other financial instruments on multiple exchanges around the world. 108 Table of Contents We offer comprehensive brokerage services through our integrated single-account structure, which empowers users in trade execution, margin financing and securities lending across different global markets.
Removed
We expect that our execution and clearing expenses will increase in absolute amount and as a percentage of total revenues as we expand our brokerage business and serve more consolidated accounts. 111 Table of Contents Employee compensation and benefits Employee compensation and benefits expenses include salaries, wages, bonuses, share-based compensation and other benefits for all employees.
Added
An entity could re-apply for the HNTE certificate when the prior certificate expires. Historically, all companies successfully re-applied for the certificates when the prior once expired. Our other subsidiaries are subject to income tax rate of 25%, according to EIT Law.
Removed
One of the VIEs’ subsidiaries, Beijing U-Tiger Business Service Co., Ltd began to qualify as an HNTE under the EIT Law in 2017, subject to the tax rate of 15% with a valid period of three years starting from December 2017 and obtained new certificate on December 2, 2020, subject to the tax rate of 15% with a valid period of three years, ending on December 31, 2022.
Added
The related enterprise income tax law also imposes a withholding income tax on dividends distributed by a foreign investment enterprise (“FIE”) to its immediate holding company outside of the PRC.
Removed
Our one subsidiary Beijing Xiangshang Yixin Technology Co., Ltd and One of the VIEs’ subsidiaries, Beijing U-Tiger Network Technology Co., LTD began to qualify as HNTE under the EIT Law on October 25, 2021 and December 17, 2021, respectively, subject to the tax rate of 15% with a valid period of three years, ending on December 31, 2023.
Added
According to the arrangement between Chinese mainland and HKSAR, dividends paid by an FIE in Chinese mainland to its immediate holding company in HKSAR will be subject to withholding tax at a rate of no more than 5%.

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Item 6. [Reserved]

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

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Biggest changeThe original maximum aggregate number of Class A ordinary shares that could be issued pursuant to all awards under the 2018 Share Incentive Plan was 187,697,314 Class A ordinary shares, which was increased to 254,697,314 Class A ordinary shares by the amendment thereto in December 2018.
Biggest changeThe original maximum aggregate number of Class A ordinary shares that could be issued pursuant to all awards under the 2018 Share Incentive Plan was 187,697,314 Class A ordinary shares, which was increased to 254,697,314 Class A ordinary shares by the amendment thereto in December 2018. 2019 Performance Incentive Plan In March 2019, we implemented the 2019 Performance Incentive Plan (the “2019 Plan”), which was approved by our board of directors to grant a maximum number of 52,000,000 ordinary shares under the 2019 Plan, to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants, and promote the success of our business.
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 126 Table of Contents • 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 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 127 Table of Contents • 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.
In such case of termination by us, we will provide severance payments and other compensation to the executive officer as expressly required by applicable laws and these employment agreements. The executive officer may resign at any time with a 60-day prior written notice. C. Board Practices Board of Directors Our board of directors consist of five directors.
In such case of termination by us, we will provide severance payments and other compensation to the executive officer as expressly required by applicable laws and these employment agreements. The executive officer may resign at any time with a 60-day prior written notice. C. Board Practices Board of Directors Our board of directors consist of six directors.
Share Ownership The following table sets forth information with respect to the beneficial ownership, within the meaning of rules and regulations of the SEC, of our ordinary shares, on a fully diluted and as-converted basis, as of March 31, 2023, by: • each of our directors and executive officers; and • each person known to us to own beneficially more than 5% of our ordinary shares.
Share Ownership The following table sets forth information with respect to the beneficial ownership, within the meaning of rules and regulations of the SEC, of our ordinary shares, on a fully diluted and as-converted basis, as of March 31, 2024, by: • each of our directors and executive officers; and • each person known to us to own beneficially more than 5% of our ordinary shares.
Board Diversity Matrix Board Diversity Matrix (As of March 31, 2023) Country of Principal Executive Offices Singapore 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 0 5 0 0 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 LGBTQ+ 0 Did Not Disclose Demographic Background 0 As of the date hereof, the Company does not meet the diversity objectives of Nasdaq Rule 5605(f)(2), due in part to the resignation of Ms.
Board Diversity Matrix Board Diversity Matrix (As of March 31, 2024) Country of Principal Executive Offices Singapore Foreign Private Issuer Yes Disclosure Prohibited under Home Country Law No Total Number of Directors 6 Female Male Non-Binary Did Not Disclose Gender Part I: Gender Identity Directors 0 6 0 0 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 LGBTQ+ 0 Did Not Disclose Demographic Background 0 As of the date hereof, the Company does not meet the diversity objectives of Nasdaq Rule 5605(f)(2), due in part to the resignation of Ms.
Charters have been adopted for each committee. Each committee’s members and functions are described below. Audit Committee. Our audit committee consists of Mr. Chia Hung Yang and Mr. Jian Liu. Mr. Chia Hung Yang is the chairman of our audit committee. We have determined that Mr. Chia Hung Yang and Mr.
Charters have been adopted for each committee. Each committee’s members and functions are described below. Audit Committee. Our audit committee consists of Mr. Chia Hung Yang, Mr. Jian Liu and Mr. Ming Liao. Mr. Chia Hung Yang is the chairman of our audit committee. We have determined that Mr. Chia Hung Yang, Mr.
Name Class A Ordinary Shares Underlying Outstanding Awards Exercise Price or Purchase Price (US$/Share) Date of Grant Date of Expiration Katherine Wei Wu * December 11, 2019 December 10, 2029 Lei Fang US$0.00001 October 1, 2015 September 30, 2025 US$0.00001 January 4, 2016 January 3, 2026 US$0.00001 April 1, 2016 March 31, 2026 US$0.0001 October 1, 2018 September 30, 2028 * US$0.20000 January 1, 2019 December 31, 2028 Lei Huang * May 1, 2020 April 30, 2030 Chia Hung Yang * January 23, 2023 January 22, 2033 Jian Liu * April 15, 2021 April 14, 2031 March 19,2022 March 18,2032 * Less than 1% of our total outstanding Class A ordinary shares.
Name Class A Ordinary Shares Underlying Outstanding Awards Exercise Price or Purchase Price (US$/Share) Date of Grant Date of Expiration Katherine Wei Wu * December 11, 2019 December 10, 2029 Lei Fang US$0.00001 October 1, 2015 September 30, 2025 US$0.00001 January 4, 2016 January 3, 2026 US$0.00001 April 1, 2016 March 31, 2026 US$0.0001 October 1, 2018 September 30, 2028 * US$0.20000 January 1, 2019 December 31, 2028 Lei Huang * May 1, 2020 April 30, 2030 Chia Hung Yang * January 23, 2023 January 22, 2033 Jian Liu April 15, 2021 April 14, 2031 * ​ March 19,2022 March 18,2032 Ming Liao * January 10, 2024 January 9, 2034 * Less than 1% of our total outstanding Class A ordinary shares.
We may terminate employment for cause, for certain acts of the executive officer, such as conviction or plea of guilty to a felony or any crime involving moral turpitude, or a continued failure to 124 Table of Contents perform agreed duties. We may also terminate an executive officer’s employment without cause upon 60-day prior written notice.
We may terminate employment for cause, for certain acts of the executive officer, such as conviction or plea of guilty to a felony or any crime involving moral turpitude, or a continued failure to perform agreed duties. We may also terminate an executive officer’s employment without cause upon 60-day prior written notice.
Our compensation committee is responsible for periodically reviewing the Company’s compensation policies and practices in order to assess whether such policies and practices create risks that are reasonably likely to have a material adverse effect on the Company. D. Employees We had 785 and 1,134 employees as of December 31, 2020 and 2021 respectively.
Our compensation committee is responsible for periodically reviewing the Company’s compensation policies and practices in order to assess whether such policies and practices create risks that are reasonably likely to have a material adverse effect on the Company. D. Employees We had 1,134 and 1,040 employees as of December 31, 2021 and 2022 respectively.
Our Class A ordinary shares and Class B ordinary shares vote together as a single class on all matters submitted to a vote of our shareholders, except as may otherwise be required by law. * Less than 1% of our total outstanding shares 1.
Our Class A ordinary shares and Class B ordinary shares vote together as a single class on all matters submitted to a vote of our shareholders, except as may otherwise be required by law. 129 Table of Contents * Less than 1% of our total outstanding shares 1.
Each Class A ordinary share is entitled to one vote, and is not convertible into Class B ordinary share under any circumstance. Each Class B ordinary share is entitled to 20 votes and will be automatically convert into one Class A ordinary share under certain circumstances. Our dual-class ordinary share structure involves certain risks.
Each Class A ordinary share is entitled to one vote, and is not convertible into Class B ordinary share under any circumstance. Each Class B ordinary share is entitled to 20 votes and will be automatically convert into one Class A 130 Table of Contents ordinary share under certain circumstances. Our dual-class ordinary share structure involves certain risks.
Chia Hung Yang qualifies as an “audit committee 125 Table of Contents financial expert.” The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company.
Chia Hung Yang qualifies as an “audit committee financial expert.” The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company.
Tianhua Wu; and (iii) 41,514,395 Class A Ordinary Shares held by Kastle Limited, a subsidiary of the Company, for the benefit of certain participants of the Plans, with the voting rights attached thereto irrevocably entrusted to Mr. Tianhua Wu. 6. Represents 97,611,722 Class B Ordinary Shares held by Sky Fintech Holding Limited, which are beneficially owned by Mr.
Tianhua Wu; and (iii) 37,764,395 Class A Ordinary Shares held by Kastle Limited, a subsidiary of the Company, for the benefit of certain participants of the Plans, with the voting rights attached thereto irrevocably entrusted to Mr. Tianhua Wu. 5. Represents 97,611,722 Class B Ordinary Shares held by Sky Fintech Holding Limited, which are beneficially owned by Mr.
Our compensation committee consists of Mr. Tianhua Wu, Mr. Lei Huang and Mr. Lei Fang. Mr. Tianhua Wu is the chairman of our compensation committee. The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers.
Our compensation committee consists of Mr. Tianhua Wu, Mr. John Fei Zeng and Mr. Lei Fang. Mr. Tianhua Wu is the chairman of our compensation committee. The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers.
Wu, with the voting rights entrusted to 129 Table of Contents him under the 2018 and 2019 Performance Incentive Plan, is able to exercise 55.82% of the aggregate voting power of our total issued and outstanding share capital. As such, Mr.
Wu, with the voting rights entrusted to him under the 2018 and 2019 Performance Incentive Plan, is able to exercise 55.48% of the aggregate voting power of our total issued and outstanding share capital. As such, Mr.
Jian Liu satisfy the “independence” requirements of Rule 5605(c)(2) of the Listing Rules of The Nasdaq Stock Market LLC and Rule 10A-3 under the Exchange Act. We have determined that Mr.
Jian Liu and 126 Table of Contents Mr. Ming Liao satisfy the “independence” requirements of Rule 5605(c)(2) of the Listing Rules of The Nasdaq Stock Market LLC and Rule 10A-3 under the Exchange Act. We have determined that Mr.
Nominating and Corporate Governance Committee. Our nominating and corporate governance committee consists of Mr. Tianhua Wu, Mr. Lei Huang and Mr. Lei Fang. Mr. Tianhua Wu is the chairman of our nominating and corporate governance committee.
Nominating and Corporate Governance Committee. Our nominating and corporate governance committee consists of Mr. Tianhua Wu, Mr. John Fei Zeng and Mr. Lei Fang. Mr. Tianhua Wu is the chairman of our nominating and corporate governance committee.
The maximum aggregate number of Class A ordinary shares that could be issued pursuant to all awards under the 2019 Plan and 2018 Share Incentive Plan was 375,825,963 as of March 2023 (not accounting for future increases under the Evergreen Option) and the Company issued 375,825,957 Class A ordinary shares to the Plan as of March 2023.
The maximum aggregate number of Class A ordinary shares that could be issued pursuant to all awards under the 2019 Plan and 2018 Share Incentive Plan was 568,287,985 as of March 2024 (not accounting for future increases under the Evergreen Option) and the Company issued 375,825,957 Class A ordinary shares to the Plans as of March 124 Table of Contents 2024.
Tianhua Wu has served as our Chief Executive Officer, or CEO, and director since January 2018. Mr. Wu is the founder and CEO of Beijing Rongke since June 2014. Between 2005 and 2014, Mr. Wu served at Youdao of NetEase Inc., where he was responsible for core search. Mr. Wu has received many honors in the business world.
Mr. Wu is the founder and CEO of Beijing Rongke since June 2014. Between 2005 and 2014, Mr. Wu served at Youdao of NetEase Inc., where he was responsible for core search. Mr. Wu has received many honors in the business world.
Tianhua Wu through Tiger Family Trust; (ii) 228,206,310 Class A Ordinary Shares in the form of ADSs issued to participants of the UP Fintech Holding Limited Share Incentive Plan and the UP Fintech Holding Limited 2019 Performance Incentive Plan of the Issuer (the “Plans”) by exercise of awards thereof, with the voting rights attached thereto irrevocably entrusted to Mr.
Tianhua Wu through Tiger Family Trust; (ii) 190,004,640 Class A Ordinary Shares in the form of ADSs issued under the UP Fintech Holding Limited Share Incentive Plan and the UP Fintech Holding Limited 2019 Performance Incentive Plan of the Issuer (the “Plans”) with the voting rights attached thereto irrevocably entrusted to Mr.
Compensation Compensation of Directors and Executive Officers In 2022, we paid an aggregate of RMB2.4million (US$0.3 million), HKD1.9million (US$0.2 million) and US$0.4 million in cash to our executive officers and directors, and US$0.2 million to our non-executive directors.
Compensation Compensation of Directors and Executive Officers In 2023, we paid an aggregate of RMB2.1million (US$0.3 million), HKD2.0million (US$0.2 million) and US$0.4 million in cash to our executive officers and directors, and US$0.2 million to our non-executive directors.
See Item 3.D “Risk Factors” of this Annual Report on Form 20-F for more information about risks associated with our dual-class share structure. For a description of arrangements for involving employees in the capital of the Company, see Item 6.B. 130 Table of Contents
See “Item 3.D. Risk Factors” of this Annual Report on Form 20-F for more information about risks associated with our dual-class share structure. For a description of arrangements for involving employees in the capital of the Company, see Item 6.B. F . Disclosure of a registrant’s action to recover erroneously awarded compensation. Not applicable. 131 Table of Contents
Employment Agreements and Indemnification Agreements We have entered into employment agreements with each of our executive officers. The current term of these employment agreements will be until the next shareholders meeting, unless terminated earlier pursuant to the provisions thereof, and these agreements will be automatically extended for successive periods of 12 months each subject to the provisions thereof.
The current term of these employment agreements will be until the next shareholders meeting, unless terminated earlier pursuant to the 125 Table of Contents provisions thereof, and these agreements will be automatically extended for successive periods of 12 months each subject to the provisions thereof.
Department Number of employees % of total Research and development and technology 437 42.0% Compliance, legal and finance 157 15.1% Business and customer support 190 18.3% Marketing 47 4.5% Operations 63 6.1% General and administration 146 14.0% Total 1,040 100.0% We enter into individual employment contracts with selected employees to cover matters including non-competition and confidentiality arrangements.
Department Number of employees % of total Research and development and technology 495 44.7% Compliance, legal and finance 166 15.0% Business and customer support 168 15.1% Marketing 49 4.4% Operations 71 6.4% General and administration 160 14.4% Total 1,109 100.0% We enter into individual employment contracts with selected employees to cover matters including non-competition and confidentiality arrangements.
Tianhua Wu has the power to direct the trustee with respect to the retention or disposal of, and the exercise of any voting and other rights attached to, the shares held by Sky Fintech Holding Limited in our company. 7. Represents 21,195,990 Class A Ordinary Shares in the form of ADSs as of March 31, 2023 issued to Mr.
Tianhua Wu has the power to direct the trustee with respect to the retention or disposal of, and the exercise of any voting and other rights attached to, the shares held by Sky Fintech Holding Limited in our company. 6. On September 6, 2023, Mr.
Binsen Tang, a PRC resident, is a director of, and has the ultimate control in, Tigerex Holding Limited. 180,756,765 Class A ordinary shares were in the form of ADS. 4.
Binsen Tang, a PRC resident, is a director of, and has the ultimate control in, Tigerex Holding Limited. 180,756,765 Class A ordinary shares were in the form of ADS. 4. Representing (i) 240,000,000 Class A Ordinary Shares in the form of ADSs held by Sky Fintech Holding Limited, which are beneficially owned by Mr.
Name ADS Number Percentage of Class Class A Number 1 Shares Percentage of Class Class B Number Shares Percentage of Class Total Percentage Voting Power Major Shareholders ​ ​ Xiaomi Corporation 2 — — 250,641,392 10.40% — — 5.75% Tigerex Holding Limited 3 12,050,451 8.90% 180,756,765 7.50% — — 4.14% IB Global Investments LLC 4 5,025,344 3.71% 150,760,322 6.26% — — 3.46% Directors and Executive Officers ​ ​ Tianhua Wu 5 6 31,213,754 23.04% 509,720,705 21.15% 97,611,722 100% 56.44% John Fei Zeng * * * * — — — Lei Fang 7 1,413,066 1.04% * * — — — Katherine Wei Wu * * * * — — — Jian Liu — — — — — — — All directors and executive officers as a group 31,213,754 23.04% 536,916,705 21.15% 97,611,722 100% 57.07% Notes: 128 Table of Contents For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our Class A and Class B ordinary shares as a single class.
Name ADS Number Percentage of Class Class A Number 1 Shares Percentage of Class Class B Number Shares Percentage of Class Total Percentage Voting Power Major Shareholders ​ ​ Xiaomi Corporation 2 — — 250,641,392 10.40% — — 5.75% Tigerex Holding Limited 3 12,050,451 8.88% 180,756,765 7.50% — — 4.14% Directors and Executive Officers ​ ​ Tianhua Wu 4 5 6 16,000,000 11.79% 467,769,035 19.41% 97,611,722 100% 55.48% John Fei Zeng * * * * — — — Lei Fang 7 1,413,066 1.04% * * — — — Ming Liao — — — — — — — Chia Hung Yang — — — — — — — Jian Liu * * — — — — — All directors and executive officers as a group 17,986,397 13.25% 496,965,025 20.63% 97,611,722 100% 56.15% Notes: For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our Class A and Class B ordinary shares as a single class.
Yang was the chief executive officer of Rock Mobile Corporation from 2004 to 2007, and the chief financial officer of the Asia Pacific region for Cellstar Asia Corporation from 1999 to 2004. Prior to that, 122 Table of Contents Mr.
Yang was the chief executive officer of Rock Mobile Corporation from 2004 to 2007, and the chief financial officer of the Asia Pacific region for Cellstar Asia Corporation from 1999 to 2004. Prior to that, Mr. Yang was a senior banker at Goldman Sachs (Asia) L.L.C., Lehman Brothers Asia Limited and Morgan Stanley Asia Limited from 1992 to 1999. Mr.
As of March 31, 2023, 123 Table of Contents 284,839,496 Class A ordinary shares have been granted, excluding awards that were forfeited or cancelled after the relevant grant dates. The following paragraphs describe the principal terms of the 2019 Plan. Types of Awards.
As of March 31, 2024, 314,623,866 Class A ordinary shares have been granted, excluding awards that were forfeited or cancelled after the relevant grant dates.
Mr. Lei Fang has served as our director since June 2018. Mr. Fang has served as a vice president of Beijing Rongke since 2016.
Zeng obtained a B.S. degree in business administration from the University of Southern California and a MBA from New York University. Mr. Lei Fang has served as our director since June 2018. Mr. Fang has served as a vice president of Beijing Rongke since 2016.
Directors and Executive Officers Age Position/Title Tianhua Wu 38 Chief Executive Officer and Director John Fei Zeng 43 Chief Financial Officer and Director Katherine Wei Wu 49 Chief Compliance Officer Lei Fang 35 Director Jian Liu 51 Independent director Chia Hung Yang 60 Independent director Mr.
Directors and Executive Officers Age Position/Title Tianhua Wu 39 Chief Executive Officer and Director John Fei Zeng 44 Chief Financial Officer and Director Lei Fang 36 Director Jian Liu 52 Independent director Chia Hung Yang 61 Independent director Ming Liao 52 Independent director Mr. Tianhua Wu has served as our Chief Executive Officer, or CEO, and director since January 2018.
As of December 31, 2022, we had 1,040 employees, with 872 based in Chinese mainland and Hong Kong, 63 based in the United States, 53 based 127 Table of Contents in Singapore, 35 based in New Zealand and 17 based in Australia. Below is a breakdown of employees by their departments as of December 31, 2022.
As of December 31, 2023, we had 1,109 employees, with 911 based in Chinese mainland and Hong Kong, 76 based in the United States, 51 based 128 Table of Contents in Singapore, 40 based in New Zealand, 19 based in Australia and 12 based in another country.
Yang received his master’s degree in business administration from the University of California, Los Angeles. There are no familial relationships among any of the Company’s directors or senior managers set forth above.
Liao obtained his bachelor’s degree in economics from Renmin University of China in 1995, and his master’s degree in public affairs from the Woodrow Wilson School of Public and International Affairs at Princeton University in 2000. There are no familial relationships among any of the Company’s directors or senior managers set forth above.
Yang was a senior banker at Goldman Sachs (Asia) L.L.C., Lehman Brothers Asia Limited and Morgan Stanley Asia Limited from 1992 to 1999. Mr. Yang currently also serves as an independent director of Ehang Holdings Limited (Nasdaq: EH), I-Mab (Nasdaq: IMAB), iQIYI, Inc. (Nasdaq: IQ) and Tongcheng Travel Holdings Limited (HKSE: 0780). Mr.
Yang currently also serves as an independent director of Ehang Holdings Limited (Nasdaq: EH), I-Mab (Nasdaq: IMAB), iQIYI, Inc. (Nasdaq: IQ) and Tongcheng Travel Holdings Limited (HKSE: 0780). Mr. Yang received his master’s degree in business administration from the University of California, Los Angeles. 123 Table of Contents Mr. Ming Liao has served as our director since January 2024. Mr.
Removed
Zeng obtained a B.S. degree in business administration from the University of Southern California and a MBA from New York University. Ms. Katherine Wei Wu has served as our Chief Compliance Officer since April 2019. Ms. Wu has over 20 years of experience in compliance at various international financial institutions. Ms.
Added
Liao has been a founding partner and director of Prospect Avenue Capital, a late-stage private equity fund manager focusing on the internet industry since July 2016. From February 2014 to February 2015, Mr. Liao served as the chief representative of UBS AG’s Beijing representative office, working at its investment banking division. Prior to joining UBS, Mr.
Removed
Wu served as Executive Director in Compliance at Haitong International from February 2016 to February 2019. She served as Executive Director in Compliance at Mitsubishi UFJ Securities (USA), Inc. from August 2010 to January 2016. Ms. Wu obtained her Juris Doctor degree from Fordham University School of Law and Bachelor of Arts (B.A.) degree in Economics from Mount Holyoke College.
Added
Liao was a director at the investment banking division of Barclays Capital Asia from May 2011 to March 2013. Before Barclays, Mr. Liao was a vice president at The Carlyle Group’s investor relations division from September 2008 to May 2011, responsible for fund raising in China. Prior to joining Carlyle, Mr.
Removed
As of the date of March 31, 2023, options to purchase 199,230,744 and 28,303,681 Class A ordinary shares have been granted and are outstanding and 146,942,947 and 80,954,774 restricted share units, excluding awards that were forfeited or cancelled after the relevant grant dates. 2019 Performance Incentive Plan In March 2019, we implemented the 2019 Performance Incentive Plan (the “2019 Plan”), or the 2019 Performance Incentive Plan, which was approved by our board of directors to grant a maximum number of 52,000,000 ordinary shares under the 2019 Plan, to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants, and promote the success of our business.
Added
Liao was a vice president in the investment banking division of Morgan Stanley Asia from August 2006 to August 2008. Mr. Liao currently serves as an independent director of Gaotu Techedu Inc. (NYSE: GOTU). Mr.
Removed
In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days, including through the exercise of any option, warrant or other right or the conversion of other securities.
Added
In addition, as of the date of March 31, 2024, options to purchase 199,230,744 and 25,047,401 Class A ordinary shares have been granted and are outstanding, along with 182,960,972 and 79,827,864 restricted share units have been granted and are unvested. The following paragraphs describe the principal terms of the 2019 Plan. Types of Awards.
Removed
These shares, however, are not included in the computation of the percentage ownership of any other person.
Added
Employment Agreements and Indemnification Agreements We have entered into employment agreements with each of our executive officers.
Removed
The information provided with respect to IB Global Investments LLC is derived from a Schedule 13D filed by IB Global Investments LLC, IBG LLC, Interactive Brokers Group, INC., IBG Holdings LLC, IBKR Member Holdings LLC and the Thomas Peterffy 2018 Revocable Trust on May 20, 2019.
Added
Below is a breakdown of employees by their departments as of December 31, 2023.
Removed
Interactive Brokers Group, Inc., a U.S. company incorporated in Greenwich, Connecticut and listed on The Nasdaq Stock Market LLC (stock symbol: IBKR), is the managing member of IBG LLC, a U.S. company incorporated in Greenwich, Connecticut. 5.
Added
Tianhua Wu filed with the SEC a Form 144 (SEC File Number: 001-38833) in accordance with Rule 144 under the Securities Act of 1933, as amended. The filing disclosed Mr.
Removed
Representing (i) 240,000,000 Class A Ordinary Shares in the form of ADSs held by Sky Fintech Holding Limited, which are beneficially owned by Mr.
Added
Tianhua Wu's intention to sell up to 10 million ADSs under a plan intended to satisfy the affirmative defense conditions of Rule 10b5–1(c) under the Securities Exchange Act of 1934, as amended. Subsequently, on September 7, 2023, a Form 6-K was furnished to provide additional clarification regarding the aforementioned Form 144 filing pertaining to the proposed sale of securities.
Added
The Form 144 pertained to the total number of 10 million ADSs associated with TIGR call options proposed for sale under Mr. Wu's Rule 10b5-1 plan, and the exercise prices were set deep out-of-the-money, with a relatively low probability of being exercised.
Added
As of March 31, 2024, none of the call options were exercised due to the deep out-of-the-money strike price. Consequently, the covered shares, which are owned by Mr. Wu, have not been transferred. 7. Represents 21,195,990 Class A Ordinary Shares in the form of ADSs as of March 31, 2024 issued to Mr.

Item 7. Management's Discussion & Analysis

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

5 edited+0 added−17 removed14 unchanged
Biggest changeUnder these agreements, we agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our company. 131 Table of Contents Share Incentive Plan See “Item 6. Directors, Senior Management and Employees-B.
Biggest changeWe have also entered into indemnification agreements with each of our directors and executive officers. Under these agreements, we agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our company.
As of December 31, 2022, the amount due from Alphalion Group regarding prepaid IT service fee and together with the short-term interest-free loans of previous year, total amount due from Alphalion Group was US$1.0 million. By the year end of 2022, IT service fee paid to Alphalion Group was US$0.14 million.
As of December 31, 2023, the amount due from Alphalion Group regarding prepaid IT service fee and together with the short-term interest-free loans of previous year, total amount due from Alphalion Group was US$1.0 million. By the year end of 2023, IT service fee paid to Alphalion Group was US$0.15 million.
Revenue earned by providing brokerage services and margin loans to such directors and executive officers amounted to US$0.1 million for the year ended 2022. C. Interests of Experts and Counsel Not applicable. 133 Table of Contents
Revenue earned by providing brokerage services and margin loans to such directors and executive officers amounted to US$1.5 million for the year ended 2023. C. Interests of Experts and Counsel Not applicable.
Amounts due from related parties in the consolidated balance sheets as of December 31, 2022, were receivable from such directors and executive officers and amounted to US$3.8 million. Amounts due to directors and executive officers amounted to US$0.5 million at the end of December 31, 2022.
Amounts due from related parties in the consolidated balance sheets as of December 31, 2023, were receivable from such directors and executive officers and amounted to US$7.0 million. Amounts due to directors and executive officers amounted to US$10.1 million at the end of December 31, 2023.
Transactions with Alphalion Technology Holding Limited and its affiliates (“Alphalion Group”) In February of 2019, we and our affiliates entered into a series of agreements with respective parties regarding the investment in Alphalion Technology Holding Limited.
Share Incentive Plan See Item 6.B “Compensation - Compensation of Directors and Executive Officers.” 132 Table of Contents Other Transactions with Related Parties Transactions with Alphalion Technology Holding Limited and its affiliates (“Alphalion Group”) In February of 2019, we and our affiliates entered into a series of agreements with respective parties regarding the investment in Alphalion Technology Holding Limited.
Removed
We have also entered into indemnification agreements with each of our directors and executive officers.
Removed
Compensation of Directors, Supervisors and Executive Directors-Share Incentive Plans.” Other Transactions with Related Parties Our Relationship with Xiaomi Xiaomi Corporation, or Xiaomi, beneficially owns 250,641,392 of our Class A Shares.
Removed
In February 2021, we completed a financing transaction in which a group of investors led by an affiliate of Xiaomi Corporation purchased convertible notes in an aggregate principal amount of US$65.0 million through a private placement, of which Xiaomi purchased convertible notes in amount of US$30.0 million. The convertible notes will mature in 2026 unless previously converted.
Removed
The accounting treatment for the convertible notes is disclosed in Note 9 in our audited consolidated financial statements. In January 2022, Xiaomi Corporation waived its right to participate in the financial and operational decision-making of the Company. For more detail of the transaction, please see Note 16 in our audited consolidated financial statements.
Removed
Agreements with Interactive Brokers Interactive Brokers’ affiliate IB Global Investment LLC became one of our major shareholders in June 2018, holding more than 5% of our total share capital as of the date of this report.
Removed
Our New Zealand operating entity, Tiger Brokers (NZ) Limited (previously named Top Capital Partners), entered into a Consolidated Account Clearing Agreement with Interactive Brokers LLC in November 2016. Under this agreement, Tiger Brokers (NZ) Limited maintained consolidated accounts with Interactive Brokers while Interactive Brokers provided execution and clearing services for such consolidated accounts.
Removed
Tiger Brokers (NZ) Limited was solely responsible for the solicitation, opening, approval and monitoring of all consolidated accounts. Tiger Brokers (NZ) Limited was required to provide a US$10,000 application deposit as well as commissions and fees to Interactive Brokers equal to Interactive Brokers’ standard commission and fees.
Removed
All securities, cash, investment, collateral and property held by or on behalf of Interactive Brokers for our consolidated accounts are subject to a perfected first priority lien and security interest in the favor of Interactive Brokers to secure the performance of our obligations and liabilities under the agreement. Either party may terminate this agreement at any time.
Removed
Tiger Brokers (NZ) Limited entered into a Fully Disclosed Clearing Agreement with Interactive Brokers LLC in November 2016 whereby Tiger Brokers (NZ) Limited introduced accounts to Interactive Brokers on a fully disclosed basis in return of Interactive Brokers providing execution and clearing services for such fully disclosed accounts.
Removed
Under this agreement, Interactive Brokers was responsible for the opening, approval, monitoring and supervision of the fully disclosed accounts including KYC procedures while we are required to perform certain additional KYC functions. Tiger Brokers (NZ) Limited was required to provide a US$10,000 application deposit for each account as well as commissions and fees to Interactive Brokers.
Removed
Interactive Brokers’ share of the commissions and fees collected for transaction in the fully disclosed accounts were equal to its standing commission and fees. The remainder of the commissions and fees collected for the fully disclosed accounts were remitted periodically to Tiger Brokers (NZ) Limited.
Removed
All the property held by or on behalf of Interactive Brokers for our fully disclosed accounts are subject to a perfected first priority lien and security interest in the favor of Interactive Brokers to secure the performance of our obligations and liabilities under the agreement. Either party may terminate this agreement at any time.
Removed
Tiger Brokers (NZ) Limited also cooperated with Interactive Brokers LLC in several deals involving allocation of shares in the process of initial public offerings by a few issuers. 132 Table of Contents Tiger Brokers (Singapore) PTE Ltd entered into a Consolidated Account Clearing Agreement with Interactive Brokers LLC on October 15, 2019.
Removed
Under this agreement, Tiger Brokers (Singapore) PTE Ltd maintained consolidated accounts with Interactive Brokers while Interactive Brokers provided execution and clearing services for such consolidated accounts. Tiger Brokers (Singapore) PTE Ltd was solely responsible for the solicitation, opening, approval and monitoring of all consolidated accounts.
Removed
All securities, cash, investment, collateral and property held by or on behalf of Interactive Brokers for our consolidated accounts are subject to a perfected first priority lien and security interest in the favor of Interactive Brokers to secure the performance of our obligations and liabilities under the agreement. Either party may terminate this agreement at any time.
Removed
Due to the resignation of the director assigned by Interactive Brokers in March 2022, Interactive Brokers LLC was no longer considered a related party in 2022.
Removed
From January to March of 2022, we recorded US$9.7 million in commissions and financing service fees earned from customer trades cleared by and margin transactions provided by Interactive Brokers and US$1.8 million in execution and clearing fees paid to Interactive Brokers.

Other TIGR 10-K year-over-year comparisons