China says 'illegal' outbound investment crackdown won't lead to forced liquidation

June 8 (Reuters) - China's crackdown on "illegal" cross-border investment won't lead to mainlanders' offshore accounts being closed and assets liquidated forcibly, the securities regulator said, amid investor concerns over the ‌fate of $54 billion worth of assets.

Some savers from mainland China are travelling to Hong ‌Kong and scrambling to explore options to retain their investments in the financial hub, after Beijing's unexpected crackdown last month on "illegal" ​cross-border securities trading.

The clamp-down and the sanctioning of overseas brokers for "illegally" helping Chinese investors buy shares in foreign markets does not affect their business activities offshore, said the watchdog in response to Reuters queries.

The China Securities Regulatory Commission (CSRC) statement is the clearest indication yet that overseas brokerages can continue to offer legitimate offshore ‌services to mainland clients.

The latest statement ⁠comes amid growing confusion among Chinese investors over how to deal with their money and investments in offshore brokerage accounts - worth about $54 billion according to Chinese ⁠broker Kaiyuan Securities.

Fears of forced liquidation triggered a sell-off in U.S.-listed Chinese stocks immediately after the crackdown was announced on May 22.

"Safety of investors' assets will not be affected by the rectification campaign," the CSRC said ​in the ​statement. "Existing accounts will not be forcibly closed, and assets ​held in those accounts will not be ‌subject to mandatory cleanup."

Onshore Chinese investors can sell assets and move money out of the affected accounts, while brokers' provision of illicit services on the mainland, including via websites and trading software, will be terminated in two years, the CSRC said.