Chinese authorities have reportedly imposed stricter rules on their citizens’ investments in the U.S. equity markets.

The China Securities Regulatory Commission (CSRC) has mandated that investors must only purchase overseas stocks through official channels. This comes in the wake of the announcement of IPO details by SpaceX and Anthropic, which are anticipated to generate substantial interest in U.S. tech stocks, reported the Financial Times on Tuesday.

CSRC fined three companies for allowing Chinese investors to purchase overseas stocks through a loophole. Additionally, Hong Kong authorities have initiated reviews of 12 other companies. Investors are now only permitted to sell assets and withdraw funds from these brokers for the next two years, with no option to buy new shares.

Citic Securities estimates that up to $32 billion in mainland Chinese investor assets could be affected by new restrictions, as brokers in China and Hong Kong tighten compliance rules for accounts investing in overseas equities.

The three brokerages targeted by regulators were Futu Holdings, Tiger Brokers, and Longbridge. Their U.S.-listed shares experienced a nearly 30% drop following the news of the fines, but have since recovered. All three firms have committed to adhering ...