The Japan Securities and Exchange Surveillance Commission has recommended that the Prime Minister and the Commissioner of the Financial Services Agency take administrative action against moomoo Securities Co., Ltd. after an inspection found serious investor protection failures. The main issue was the firm’s sale of U.S. exchange traded products as eligible for the Small-Amount Investment Tax Exemption System (NISA) even though they fell under exclusion criteria, alongside broader weaknesses in customer handling, securities administration, suspicious transaction controls, system risk management and governance. According to the inspection, moomoo displayed at least 77 U.S. ETFs and ETNs as NISA-eligible on its website and app between 21 February and 27 May 2025, leading 59 customers to trade 25 of those products in NISA accounts. After suspending those sales, the firm did not put in effective corrective controls and repeated the problem for one U.S. ETF between 19 November 2025 and 14 January 2026, affecting one further customer. The commission also cited an extremely careless and inconsistent response to affected customers, including delays in correcting annual investment quotas for 58 customers, refusal since April 2024 to generally accept transfer-out requests for domestic listed shares and, since September 2024, similar restrictions for certain public investment trusts, failure to examine suspicious transaction reporting for at least 1,531 rejected account-opening cases between September 2023 and 17 July 2025, and deficient system risk assessment, cybersecurity, incident management, monitoring, audit and management oversight. The commission said these problems stemmed from insufficient management and internal control systems and were serious enough to warrant administrative action in the public interest and for investor protection.

Original source Back to tracker