Jack Ma's Hundsun Halts New Trading System Account Openings

An enterprise controlled by the Chinese ecommerce giant, Alibaba Group's founder, has taken an action to appease the authorities of the People’s Republic of China. Alibaba news exclaimed that Hudson Technologies has stated that it would refuse to open new accounts on its trading platform. The announcement has followed a crackdown by China’s securities regulatory body on information technology firms that serve their customers with share-dealing facilities.

Alibaba news today disclosed that the share dealing services provider would not let its existing customers add new funds into their accounts and will terminate all accounts with zero balances. The organization’s share value has decreased by 10%. It is expected that the step will significantly affect the earnings of Hangzhou Hundsun Network Technology Services Co., the pioneer of the HOMS system in which the share trading company owns a 60% stake. 

Hundsun Networks suffered from a loss of worth $2,400,000 in the initial part of the year. Alibaba breaking news informed that the China Securities Regulatory Commission stopped information technology firms on 12^th July from conducting any illegal activity in the share market and told share dealers to ensure they were aware of their customer’s identity when they manage stock transactions through external trading agencies controlled by organizations.

The regulator has stated that it had sent an enforcement team to the share dealer to find out that whether it is complying market rules. Commercial sources indicated that uncontrolled margin financing outside the brokerage system of the second largest economy of the world is widely viewed as the factor responsible for the fluctuations of the stock market.

Hudson Technologies has claimed that it has not contributed to the collapse of the market. Market professionals believe that the decision to halt accounts would not only reduce its customers but also damage the reputation of the Chinese ecommerce company.

The HOMS system is often employed by trust firms, private equity funds, and online lenders to provide trading facilities to their customers, as it divides a registered trading account into subunits managed by different people. As China stocks appreciated earlier, some online lenders began to employ HOMS to develop margin-trading accounts outside the control of the brokerage firms, who were only able to witness the main account.

It is most likely that Alibaba’s competitors would welcome the share-dealing firm’s action. The Chinese selling giant should now intervene to not only ensure that the firm starts welcoming its customers again, but also address the concerns of the authorities of the world’s most populated country, or both organizations would suffer in the highly competitive world.

Alibaba is known for its attempts to expand in USA. The global culture diversification might add to the value of the company in near future.