Mainland Investors Only Allowed to Sell US Stocks: Nasdaq Retreats 10%, KOSPI Plunges Nearly 40%

July 29. Earlier, on May 22, the China Securities Regulatory Commission announced a strict crackdown on illegal cross-border business activities by institutions such as Tiger Brokers, Futu, and Chang Bridge, with eight government departments simultaneously initiating a campaign to rectify illegal cross-border securities business. For mainland investors, the trading access to US stocks was switched to "sell-only," and existing users can only sell their positions and withdraw their funds.

At that time, the market jokingly referred to this arrangement as the "signal to exit at the peak" given by the government.

According to Hyperinsight monitoring, at the hour of the announcement, the XYZ100 on Hyperliquid traded between 29,479 points and 29,578 points. On the same day, the Nasdaq 100 index was at the same level as the XYZ100.

Subsequently, the Nasdaq 100 continued its minor rally and reached a high of 30,762.20 points on June 3, hitting a new all-time high. Following this, Tiger Brokers, Chang Bridge, and Futu collectively set June 12 as the business adjustment execution date. Mainland existing users are only allowed to sell, close positions, and withdraw funds, officially transitioning mainland US stock traders to a unidirectional exit.

In other words, mainland investors are explicitly restricted from further buying US stocks when US tech assets are already trading at historical highs. During this period, the storage and semiconductor sectors also experienced a more significant pullback.

As of the time of writing, the XYZ100 is around 27,664 points, a cumulative decline of about 10.1% from the historical high of 30,771 points. Compared to the regulatory announcement on May 22, it has also fallen by about 6.2%.

Additional data: The adjustment in the South Korean market has been more severe. The KOSPI has dropped from 7,847.71 points on May 22 to around 5,550 points, a cumulative decline of nearly 29%. Compared to the record closing high in June, the retracement is approaching 39%.