Asian Tech Press (Oct 28) -- Shares of Chinese online brokers Futu and UP Fintech fell after a speech by a Chinese central bank official.

In a speech at the 3rd Bund Summit held on October 24, Sun Tianqi, head of the Financial Stability Department of the People's Bank of China (PBOC), noted that it is illegal for foreign institutions to engage in prohibited financial businesses in the country that are not open to the public, or to conduct business in the country with only foreign licenses.

The PBOC official also pointed out, without directly naming them, that "in terms of business substance, it is illegal financial activities for cross-border online brokerage firms to operate within China."

It is reported that both U.S.-listed Futu Holdings Ltd (FUTU:NASDAQ) and UP Fintech Holding Ltd (TIGR:NASDAQ) are among the unauthorized online brokerages the official was referring to.

The shares of the two U.S.-listed brokerages were affected after the speech festered online on Thursday. Futu is currently down more than 27% in pre-market trading at $48.89 a share.

Futu responded on Thursday that the company is locally licensed and operating in Hong Kong, Singapore and the U.S., in compliance with local financial regulatory requirements, and that there is no question of a collapse.