Let's talk about the introduction of brokers and white label models in the traditional financial field, as well as the compliance history of Chinese American stock brokers. 1. The "Introducing Brokers+White Label Model" is known in the industry as "front-end customer acquisition belongs to you, back-end clearing belongs to me". Introducing brokers (IB) responsible for front-end, including market promotion, customer development, interface function development, and customer service. White label mode: Refers to upstream comprehensive clearing merchants (such as RQDClearing, Apex, etc.) packaging their underlying trading engines, clearing systems, and asset custody capabilities, and introducing brokers with their own logos (i.e. "white label"). Introducing the broker+white label model is not a gray or marginal practice, but a widely accepted and regulated business model within the industry. Under the US stock market system, the Financial Industry Regulatory Authority (FINRA) has extremely strict and clear institutional constraints on this relationship. A formal Clearing Agreement must be signed between the upstream clearing agent and the downstream white label introducer, and reported to regulatory authorities (in accordance with FINRA Rule 4311). This agreement will delineate the compliance responsibilities of both parties. Although retail investors only see the interface for introducing brokers, the legal entity for opening accounts, the actual transfer of funds to banks, and the custodian institutions for stocks are all in the hands of upstream clearing merchants at the bottom level. 2. It is necessary to talk about the compliance history of Tiger Securities and Futu here For many years before Tiger and Futu obtained their US brokerage licenses in 2019, they used the "introduction broker+white label model". At that time, the backend brokers of Tiger and Futu were both Interactive Brokers. And importantly, at that time, they were not "themselves" as referral brokers registered as FINRA (Financial Industry Regulatory Authority) members. 1) Tiger obtained a relatively easy overseas intermediary qualification through a Financial Service Provider (FSP) registered in New Zealand before 2019. Then, through this entity, the customer order is "introduced" to the real clearing broker - Interactive Brokers IBKR. The model of Tiger Securities is known as the "Onion White Label Model" in the industry. At that time, the front-end operating entity of Tiger Securities (customer acquisition entity in Chinese areas) was not directly registered with the SEC and FINRA. That is to say, before 2019, Tiger was only a global fully disclosed broker of Interactive Brokers (IB) in legal terms. Until March 2019, when Tiger Securities went public in the United States, it successfully upgraded itself to a truly compliant US domestic securities firm and direct clearing member directly regulated by FINRA through the acquisition of Marsco Investment Corporation, a decades old American domestic securities firm (later merged into the US Tiger system under Tiger's umbrella). 2) Early Futu Futu initially followed a compliance chain of "Hong Kong license bridge+US upstream clearing". Futu obtained the Class 1 (Securities Trading) statutory license from the Hong Kong Securities and Futures Commission (SFC) in 2012. Before 2018, when retail investors in mainland China opened accounts through Futu (Futu Niu Niu), the subject of the account opening agreement they signed was "Futu Securities International (Hong Kong) Limited". As a licensed securities firm in Hong Kong, Futu Hong Kong will also connect with independent clearing giants in the United States, such as BNP Paribas Clearing and Apex Clearing. Futu Hong Kong played the role of a "Hong Kong introduction broker" in the middle. In May 2019, Futu Clearing Inc., a wholly-owned subsidiary of Futu, officially obtained clearing licenses from the US SEC and FINRA, completely freeing Futu from the constraints of third-party clearing firms in the US and becoming a fully autonomous clearing company. It can be seen that early Tiger Securities was basically unlicensed before going public, and the threshold for registering as a Financial Service Provider (FSP) in New Zealand was actually very low. Futu had at least one Hong Kong securities trading license in its early days. But overall, both of these companies had average compliance qualifications before their early IPOs, and were typical of the industry's "introduction broker+white label model". It wasn't until after going public that they fully upgraded to compliant retail brokerage firms and independent clearing firms in the US stock market. 3. What is the US stock compliance brokerage license that we often refer to? The so-called compliant brokerage license in the US stock market is actually a collection of five aspects of numbering qualifications: 1) SEC registration number; 2) DTC number (usually used during US stock transfer/delivery); 3) The CRD number (Central Registration System Number) is a unique permanent identification code assigned by the Financial Industry Regulatory Authority (FINRA) to US stock brokerage firms and securities practitioners (brokers/advisors); 4) FINRA membership: FINRA has direct daily industry supervision and the authority to conduct compliant retail and institutional brokerage business in the US stock market; 5) SPIC (Securities Investor Protection Corporation) membership: Belongs to SIPC membership units. This means that in extreme situations such as bankruptcy faced by securities firms, clients' securities accounts enjoy statutory insurance protection of up to $500000 (including up to $250000 in cash). To determine whether an institution is a compliant securities firm per share, simply refer to the above five items. Many securities firms may be qualified as compliant securities firms in the US stock market, but they do not have independent clearing qualifications and need to rent clearing links from other independent clearing institutions, which is not a problem. Of course, it should be noted that although the Chinese American stock brokers Futu, Tiger, and Changqiao all have independent US stock compliance brokerage qualifications, only Futu and Tiger have independent clearing agent qualifications, and Changqiao is not an independent clearing agent. 1) Futu is the most remote and thorough independent clearing in the US stock market among Chinese Internet securities companies at present. The licensed entity established by Futu in the United States is called Futu Clearing Inc. It not only has a retail license, but also holds direct clearing membership from NSCC, DTC (DTC number 4272), and OCC (Options Clearing Company). 2) Tiger Securities, Inc., its US entity, has also successfully applied to become a direct clearing member of DTC and NSCC. At the underlying level of some complex derivatives or specific international sites, selective cooperation with Wall Street clearing giants such as Apex Clearing will still be maintained 3) Changqiao itself does not directly handle the final delivery of large accounts at the DTC/NSCC level, but outsources the underlying asset custody and clearing to companies like RQDClearing. And previously we talked about BIT, the US stock compliance broker clearing company directly connected to the cryptocurrency brokerage firm, which is also RQD Clearing. LLC, Its SEC number is 8-66810 CRD number: 134284 DTC number: 4305, Also holds FINRA and SPIC membership, It can be said that RQD is a fully compliant, highly qualified, and regulated clearing broker dealer in the United States In the US stock market ecosystem, "Clearing" is the watershed that distinguishes top giants from small and medium-sized securities firms. All US stock brokers ultimately aim to obtain a full set of licenses and qualifications, becoming a securities brokerage and clearing institution that integrates retail brokers and independent clearing firms.