China has issued a notice prohibiting domestic brokerages and their overseas units from accepting new mainland clients for Offshore trading. This move is aimed at preventing investors from bypassing China’s foreign exchange controls. The restrictions on capital outflows come as China’s economy faces faltering growth, leading to increased investment overseas and a decline in the value of the yuan. To address this issue, the China Securities Regulatory Commission (CSRC) has instructed brokerages to stop offering securities trading from offshore accounts to new mainland investors. The CSRC clarified that these activities are now considered illegal, including cross-border securities broking, securities lending, fund sales, and investment consulting. The CSRC stated that this regulatory requirement is a continuation of its ongoing efforts to rectify illegal cross-border business expansion. The directive to domestic brokerages is believed to be effective immediately, with an end of October deadline set for the removal of apps and websites soliciting mainland clients. The ban on offshore investments via domestic brokers follows similar actions taken against online brokerages earlier this year. Chinese individuals can still invest offshore through other channels such as the Stock Connect with Hong Kong and qualified domestic institutional investor programs. However, the use of Offshore Brokerage Accounts in Hong Kong requires converting yuan to other currencies. The impact of these restrictions is expected to be significant for brokerage firms with larger offshore retail business.