Congress investigates the Chinese connection to the calf: cross-border technical networks behind the securities account and government subsidies

Who is in charge of the bottom-up technology for trading software? When investors open accounts, upload identification documents, and submit trade orders, they are most concerned with the fees and speed of transaction; This week the United States Congress has asked the market to turn another account open: back-office operating structures, people management relationships, technology suppliers and who is entitled to sensitive information.

On 7 October, John Muller, Chairman of the United States House of Representatives Special Committee on China, and Roc Connor, Chief Member of the Democratic Party, released the cross-party report Free Trades, Hidden Ties, to discuss the Chinese connection to Webull. The Board made six findings: that customer data may be exposed to Chinese law and control risks; that disclosure of inaccurate locations of key personnel is inaccurate; that corporate governance is influenced by Chinese affiliates; that regulatory controls are inadequate; that associated enterprises receive local financial support linked to political conditions; and that liquidation and asset trust guarantees remain to be checked.

From US coupons to Hunan Technology, with system privileges in addition to shares

The Congressional Committee traced the long-standing links between the United States brokering of microcows and Chinese technology subjects, such as Hunan Foum, Hunan microsteps and others. The existence of technical cooperation, staff exchanges and local government incentives between associated enterprises means that investors are not only faced with a list of shareholders of securities brokers, but also with the actual operation of software, maintenance systems and business networks providing technical support. The financial resources provided by local governments to associated technology enterprises in China have become a clue to the intersection of power and business interests on the issue of data security for United States investors.

Congress also recommended that cross-border securities platforms be included in a more stringent regulatory inspection, including the reviewability of technical systems, restrictions on access to financial information by foreign affiliates, and rules on liquidation and trusteeship. It is concerned about the timeliness of the United States financial regulatory system in place once sensitive transaction data are contacted by cross-border affiliates. In the institutional environment in which Chinese national intelligence law requires business cooperation, transnational technical service contracts are already not only common procurement agreements but may also affect the privacy risks of offshore customers.

Microcows deny the inappropriate use of United States customer data. The company submitted annual reports to the United States regulator that the client ' s personal identity information was stored on a United States server and that employees outside the country were not allowed access without United States clearance and supervision; It is also revealed that mainland China ' s operations are mainly providing R & D and technical support. These arrangements demonstrate that cross-border technical relationships exist in fact, and that the key responsibility lies in how companies implement internal data segregation and are subject to continuous monitoring.

Two sets of legal systems and cross-border technical teams are drawn from one account

The calves are registered in the United States and are regulated by United States coupons, and the founders have a Chinese Internet industry background. The Commission paper refers to the technical affiliates of Fumi Technology and Hunan microsteps, and considers that the corporate organization of personnel, research and development, software services and finance is more complex than the “United States coupons” that investors usually understand.

The United States client ' s orders, identification information and funds accounts flow through different systems and developers, external support teams and managers may have access to different levels of authority. If a securities firm relies on a transnational technical team to run its core business, it must provide its clients with a clear picture of which related enterprises have access to its information, who will audit the access and which legal entity will be responsible for the leak.

The Committee indicated that some Chinese affiliates had received government awards or support and cited China ' s national intelligence law to discuss data access risks. Enterprises receiving general industrial subsidies and the Government ' s real capacity to access customer information cannot be presented without proof as equivalent. However, such subsidies and contractual relationships need to be disclosed to financial consumers in their entirety.

Six allegations, five institutional recommendations

The Commission requested that the reviewability of cross-border vouchers be strengthened, that financial information controlled by foreign opponents be restricted, that customer liquidation and self-cussion be adjusted, and that consideration be given to expanding the jurisdiction of the United States Foreign Investment Commission over foreign controlling vouchers. It is concerned with the whole business ecology and not only with penalizing a listed company.

The calf, for its part, criticized the Commission for not having fully checked information with companies, emphasizing its long-standing supervision by the United States Securities and Exchange Commission and the Financial Services Regulatory Authority. Cross-border access to United States bulk personal data depends on the administrator ' s authority of the software platform, technical support contracts and audit logs, not just the country where the server is located. For the calves, these access control arrangements directly determine the actual security boundaries of the client's information.

The core of the calf case is not the fact that the “founder came from China” identity, but the actual control channels that may exist between the brokering account and China's associated technology company. (a) The high sensitivity of identity documents, asset status and trading habits delivered by investors; If technical competence, outsourcing contracts and regulatory responsibility span multiple layers of legal persons, either party may avoid real access control issues with “data” in the United States. What the market needs is the subject responsible for the authority, not the nationality label.