UP Fintech
Annual Report 2020

Plain-text annual report

Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F Submission Data FileGeneral Information Form Type* 20-F Contact Name EDGAR Advantage Service Team Contact Phone 800-688-1933 Filer Accelerated Status* Accelerated Filer Filer File Number Filer CIK* 0001756699 (UP Fintech Holding Ltd) Filer CCC* ********** Filer is Shell Company* N Filer is Voluntary Filer* N Filer is Well Known Seasoned Issuer* Y Confirming Copy No Notify via Website only No Return Copy No SROS* NASD Period* 12-31-2020 Emerging Growth Company Yes Elected not to use extended transition period Yes(End General Information) Document Information File Count* 15 Document Name 1* tigr-20201231x20f.htm Document Type 1* 20-F Document Description 1 Form 20-F Document Name 2* tigr-20201231xex4d3.htm Document Type 2* EX-4.3 Document Description 2 Exhibit 4.3 Document Name 3* tigr-20201231xex8d1.htm Document Type 3* EX-8.1 Document Description 3 Exhibit 8.1 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tigr-20201231_def.xml Document Type 13* EX-101.DEF Document Description 13 XBRL TAXONOMY EXTENSION DEFINITION LINKBASE Document Name 14* tigr-20201231_lab.xml Document Type 14* EX-101.LAB Document Description 14 XBRL TAXONOMY EXTENSION LABEL LINKBASE Document Name 15* tigr-20201231_pre.xml Document Type 15* EX-101.PRE Document Description 15 XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE(End Document Information) Notifications Notify via Website only No E-mail 1 hkcust@toppanmerrill.com(End Notifications)  Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 1 of 194 Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 20-F(Mark One)☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934OR☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2020OR☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934OR☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Commission file number 001-38833UP FINTECH HOLDING LIMITED(Exact name of Registrant as specified in its charter)Cayman Islands(Jurisdiction of incorporation or organization)18/F, Grandyvic Building, No. 1 Building,No. 16 Taiyanggong Middle Road, Chaoyang District,Beijing, 100020 PRC Telephone: +86-10-56216660(Address of principal executive offices)John Fei Zeng, Chief Financial Officer18/F, Grandyvic Building, No. 1 Building,No. 16 Taiyanggong Middle Road, Chaoyang District,Beijing, 100020 PRCTelephone: +86-10-56216660 (Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)Securities registered or to be registered pursuant to Section 12(b) of the Act.Title of each class: Trading Symbol(s) Name of each exchange on which registered:Securities registered or to be registered pursuant to Section 12(g) of the Act: NoneSecurities for which there is a reporting obligation pursuant to Section 15(d) of the Act: NoneClass A Ordinary Shares, par value US$0.00001 per shareTIGRNasdaq Global Select MarketAmerican Depositary SharesTIGRNasdaq Global Select Market Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 2 of 194 Table of ContentsIndicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annualreport.1,985,892,425 Class A ordinary shares were outstanding as of December 31, 2020337,611,722 Class B ordinary shares were outstanding as of December 31, 2020Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.⌧ Yes ◻ NoIf this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934.◻ Yes ⌧ NoIndicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.⌧ Yes ◻ NoIndicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit suchfiles).⌧ Yes ◻ NoIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or an emerging growth company.See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.Large accelerated filer◻ Accelerated filer☒Non-accelerated filer◻Emerging growth company☒If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant haselected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section13(a) of the Exchange Act. ☒†The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its AccountingStandards Codification after April 5, 2012.Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internalcontrol over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm thatprepared or issued its audit report. ☐Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:U.S. GAAP ⌧International Financial Reporting Standards as issued by the International Accounting Standards Board ◻Other ◻If “Other” has been checked in response to the previous question indicate by check mark which financial statement item the registrant has elected tofollow.◻ Item 17 or ◻ Item 18If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).☐ Yes ☒ No Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 3 of 194 Table of Contents2TABLE OF CONTENTSPagePresentation of Financial and Certain Other Information3CONVENTIONS WHICH APPLY TO THIS REPORT4Forward-Looking Statements5PART IItem 3.Key Information6Item 4.Information on the Company51Item 5.Operating and Financial Review and Prospects91Item 6.Directors, Senior Management and Employees109Item 7.Major Shareholders and Related Party Transactions117Item 8.Financial Information121Item 9.The Offer and Listing121Item 10.Additional Information121Item 11.Quantitative and Qualitative Disclosures About Market Risk128Item 12.Description of Securities Other than Equity Securities130Part IIItem 13.Defaults, Dividend Arrearages and Delinquencies132Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds132Item 15.Controls and Procedures132Item 16A.Audit Committee Financial Expert134Item 16B.Code of Ethics134Item 16C.Principal Accountant Fees and Services134Item 16D.Exemptions from the Listing Standards for Audit Committees134Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers135Item 16F.Change in Registrant’s Certifying Accountant135Item 16G.Corporate Governance136Item 16H.Mine Safety Disclosure136Part IIIItem 18.Financial Statements137Item 19.Exhibits137Index to Consolidated Financial Statements for the Years Ended December 31, 2018, 2019 and 2020F-1 Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 4 of 194 Table of Contents3PRESENTATION OF FINANCIAL AND CERTAIN OTHER INFORMATIONUP Fintech Holding Limited, together with its consolidated subsidiaries (collectively, the “Company” or the “Group”), is a leading integratedfinancial technology platform providing cross-market, multi-product investment experience for investors around the world. In this annual report onForm 20-F, unless otherwise specified or the context otherwise indicates, all references to “UP Fintech Holding Limited” and the “Company” referto the business and operations of the Company and its consolidated subsidiaries.This annual report on Form 20-F includes the consolidated financial statements of the Company for the years ended December 31, 2018, 2019 and2020 (the “Consolidated Financial Statements”) prepared in accordance with United States Generally Accepted Accounting Principles (“USGAAP”) as issued by the Financial Accounting Standards Board.The financial statements are presented in U.S. dollars. All references to “U.S. dollars,” “US$,” “U.S. $” and “$” refer to the currency of the UnitedStates of America.The language of this annual report on Form 20-F is English. Certain legislative references and technical terms have been cited in their originallanguage so that the correct technical meaning may be ascribed to them under applicable law. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 5 of 194 Table of Contents4CONVENTIONS WHICH APPLY TO THIS REPORTExcept where the context otherwise requires and for the purposes of this Annual Report on Form 20-F only, the following is a glossary of certainterms used throughout this report:●“China” or the “PRC” means the People’s Republic of China, excluding, for the purposes of this report only, Hong Kong, Macauand Taiwan.●“Chinese investors” refer to the Chinese speaking population around the globe.●“conversion rate” means the ratio of (i) the number of trading customers to (ii) the number of customer accounts.●“customer(s)” or “customer account(s)” means the registered users who have passed the Know-Your- Client (“KYC”) procedures andopened a trading account on our platform (including APP and website).●“customer(s) with deposits” means the customers who have deposited funds in their accounts on our platform.●“HK$” or “Hong Kong dollars” means the legal currency of Hong Kong.●“NZ$” or “New Zealand dollars” means the legal currency of New Zealand.●“our VIEs” means Beijing Xiangshang Rongke Technology Development Co., LTD, or Beijing Rongke, formerly known as NingxiaXiangshang Rongke Technology Development Co., LTD or Ningxia Rongke, and Beijing Xiangshang Yiyi Laohu Technology GroupCo., LTD, or Beijing Yiyi; “VIE” or “VIEs” means a variable interest entity or variable interest entities.●“our WFOEs” means Beijing Bohu Xiangshang Technology Co., Ltd., or Beijing Bohu, formerly known as Ningxia XiangShangYixin Technology Co., Ltd or Ningxia Yixin and Beijing Xiangshang Yixin Technology Co., Ltd., or Beijing Yixin; “WFOE” or“WFOEs” means the wholly-foreign owned entity or wholly-foreign owned entities as provided in the relevant PRC laws andregulations.●“retention rate” means the ratio of (i) the number of trading customers in one period who continue to trade in the next period to(ii) the number of trading customers in the first period.●“RMB” or “Renminbi” means the legal currency of China.●“Singapore dollars” means the legal currency of Singapore.●“trading customer(s)” means the customers who have conducted at least one trading transaction on our platform.●“trading volume” means the total value of securities traded during a specific period of time.●“UP Fintech,” “we,” “us,” “our” and “our company” means UP Fintech Holding Limited, our Cayman Islands holding company andits subsidiaries, its consolidated VIEs entity and the subsidiaries of the VIEs.●“user(s)” or “registered user(s)” means those who have registered on our platform (including APP and website) but not necessarilyhave opened a trading account.Unless otherwise noted, the translations from Renminbi to U.S. dollars and from U.S. dollars to Renminbi in this report were made at a rate ofRMB6.5250 to US$1.0000, the exchange rate set forth in the H.10 statistical release of the Federal Reserve Board on December 31, 2020 and thetranslations from Hong Kong dollars to U.S. dollars and from U.S. dollars to Hong Kong dollars in this report were made at a rate of HK$7.7534 toUS$1.00, the exchange rate in effect as of December 31, 2020. We make no representation that Renminbi or U.S. dollar amounts referred to in thisreport could have been or could be converted into U.S. dollars or Renminbi, as the case may be, at any particular rate or at all. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 6 of 194 Table of Contents5FORWARD-LOOKING STATEMENTSThis report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “1933 Act”),and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements involve risks and uncertainties. Allstatements other than statements of current or historical facts are forward-looking statements. These statements involve known and unknown risks,uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed orimplied by the forward-looking statements.You can identify these forward-looking statements by words or phrases such as “may,” “might,” “will,” “intend,” “expect,” “anticipate,” “aim,”“estimate,” “intend,” “plan,” “believe,” “likely to” or other similar expressions. We have based these forward-looking statements largely on ourcurrent expectations and projections about future events and financial trends that we believe may affect our financial condition, results ofoperations, business strategy and financial needs. These forward-looking statements include, but are not limited to, statements about:●our goals and strategies;●our future business development, including the expansion of existing businesses and development of new businesses;●our plans for international expansion of our business;●our expectations and trends regarding our financial condition and results of operations;●expected changes in our sources and volume of revenues;●expected changes in our costs or expenditures, including those relating to regulatory compliance, personnel, development and sales of ourproducts and services, arrangements with third parties, acquisitions, cost of funding, and litigation;●our relationships with third parties on whom portions of our business depend, including Interactive Brokers;●our expectations regarding the demand for and market acceptance of our services;●expected growth of our customers, including consolidated account customers;●competition in our industry;●the impact of the COVID-19 pandemic; and●government policies and regulations relating to our industry and our company.You should read this annual report and the documents referred to herein with the understanding that our actual future results may be materiallydifferent from and worse than what we expect. Other sections of this report include additional factors which could adversely impact our businessand financial performance, including those described under the heading “Risk Factors.” Moreover, we operate in an evolving environment. Newrisk factors and uncertainties emerge from time to time and it is not possible for our management to predict all the risk factors and uncertainties,nor can we assess the impact of all the factors on our business or the extent to which any factor, or combination of factors, may cause actual resultsto differ materially from those contained in any forward-looking statements. We qualify all of our forward-looking statements by these cautionarystatements.You should not rely upon forward-looking statements as predictions of future events. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.Projections, assumptions and estimates of our future performance and the future performance of the industry in which we operate are necessarilysubject to a high degree of uncertainty and risks due to a variety of factors, including those described in Item 3.D “Risk Factors” and elsewhere inthis annual report. You should not place undue reliance on these forward-looking statements. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 7 of 194 Table of Contents6PART IItem 3. Key InformationA. Selected Financial DataThe Company has omitted the disclosure under this item in accordance with the guidance in the SEC’s Final Rule: Management’s Discussion andAnalysis, Selected Financial Data, and Supplementary Financial Information, adopted on November 19, 2020 and effective on February 10, 2021.D. Risk FactorsThe following risks should be considered in conjunction with “Item 5. Operating and Financial Review and Prospects” and the other risksdescribed under the heading “Forward-Looking Statements” above. These risks may affect the Company’s operating results and, individually or inthe aggregate, could cause its actual results to differ materially from past and anticipated future results. The following discussion of risks maycontain forward-looking statements which are intended to be covered by the Safe Harbor Statement. Except as may be required by law, theCompany undertakes no obligation to publicly update forward-looking statements, whether as a result of new information, future events, orotherwise. The Company invites you to consult any further related disclosures made by the Company from time to time in materials filed with orfurnished to the Securities and Exchange Commission, or the SEC.Risks Related to Our Business and IndustryWe have a limited operating history and our historical financial, operating results and growth rates may not be indicative of futureperformance.We have a limited operating history. We launched our trading platform in August 2015 and have experienced rapid growth since then. Our totalrevenues increased significantly from US$33.6 million in 2018 to US$58.7 million in 2019 and further increased to US$138.5 million in 2020. Wealso improved from net loss of US$44.3 million in 2018 and net loss of US$5.9 million in 2019 to net income of US$19.2 million in 2020, as aresult of growth in our businesses and improvement in economies of scale. We expect our business expansion to continue as we grow our customerbase and explore new market opportunities. However, due to our limited operating history, our historical growth rates may not be indicative of ourfuture performance. We cannot assure you that we will grow at the same rate and succeed in introducing new services and products as we did in thepast. Further, we may fail to adjust our business model to our development needs or the requirements of this ever-changing industry. You shouldconsider our prospects in light of the risks and uncertainties that a fast-growing company with a limited operating history may be exposed to orencounter.We have incurred net losses and had net operating cash outflows in the past and may incur losses and have cash outflows in the future.The fiscal year ended December 31, 2020 was the first year we have been profitable since our inception. We incurred net losses of US$44.3 millionand US$5.9 million in 2018 and 2019, respectively, and net income of US$19.2 million in 2020. In addition, we had negative cash flows fromoperating activities of US$21.2 million in 2018 and positive cash flows from operating activities of US$243.3 million in 2019 and US$535.3million in 2020. We have made significant investments in research and development, employee compensation and benefits, communication andmarket data, and marketing and branding to rapidly develop and expand our business. We expect to continue or increase such investments toestablish and expand our business, and these investments may not result in an increase in revenue or positive cash inflow from operations in atimely manner, or at all.We may incur substantial losses for a number of reasons, including the lack of a larger customer base, as well as other risks discussed herein, andwe may incur unforeseen expenses, or encounter difficulties, complications and delays in generating revenues or achieving profitability. We mayalso continue to incur net losses in the future due to changes in the macroeconomic and regulatory environment, competitive dynamics and ourinability to respond to these changes in a timely and effective manner. If we are unable to achieve profitability, we may have to reduce the scale ofour operations, which may impact our business growth and adversely affect our financial condition and results of operations. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 8 of 194 Table of Contents7Non-compliance with applicable laws in certain jurisdictions could harm our business, reputation, financial condition and results ofoperations.The businesses of securities and other financial instruments are heavily regulated. Our brokerage business is subject to regulations in the UnitedStates, Singapore, New Zealand, Australia and other jurisdictions in which we offer our products and services. Major regulatory bodies include,among others, in the United States, the Financial Industry Regulatory Authority, or the FINRA, the U.S. Securities and Exchange Commission, orthe SEC, and the Commodity Futures Trading Commission, or the CFTC; in Singapore, the Monetary Authority of Singapore, or the MAS; in NewZealand, the Financial Markets Authority New Zealand, or the FMA, the New Zealand Stock Exchange, or the NZX, and the Financial ServiceProviders Register, or the FSPR; in Australia, the Australian Securities and Investments Commission, or ASIC. Domestic and foreign stockexchanges, other self-regulatory organizations and state and foreign securities commissions can censure, fine, issue cease-and-desist orders,suspend or expel a broker and its officers or employees. Non-compliance with applicable laws or regulations could result in sanctions to be leviedagainst us, including fines and censures, suspension or expulsion from a certain jurisdiction or market or the revocation or limitation of licenses,which could adversely affect our reputation, prospects, revenues and earnings.Furthermore, securities brokerage firms are subject to numerous conflicts of interest or perceived conflicts of interest, over which federal and stateregulators and self-regulatory organizations have increased their scrutiny. Addressing conflicts of interest is a complex and difficult undertaking.Our business and reputation could be harmed if we were to fail, or appear to fail, to address conflicts appropriately.In addition, we use the Internet and mobile network as a major distribution channel to provide services to our customers. A number of regulatoryagencies have adopted regulations regarding customer privacy, system security and safeguarding practices and the use of customer information byservice providers. Additional laws and regulations relating to the Internet and mobile network and safeguarding practices could be adopted in thefuture, including laws related to access and identity theft and regulations regarding the pricing, taxation, content and quality of products andservices delivered over the Internet and mobile network. Complying with these laws and regulations may be expensive and time-consuming andcould limit our ability to use the Internet and mobile network as a distribution channel, which would have a material adverse effect on our businessand profitability.Our ability to comply with all applicable laws and rules is largely dependent on our internal and third party vendors’ system to ensure compliance,as well as our ability to attract and retain qualified compliance personnel. While we maintain systems and procedures designed to ensure that wecomply with applicable laws and regulations, violations could still occur. Some legal and regulatory frameworks provide for the imposition of finesor penalties for non-compliance even though the non-compliance was inadvertent or unintentional and even though systems and proceduresreasonably designed to prevent violations were in place at the time. There may be other negative consequences resulting from a finding of non-compliance, including restrictions on certain activities. Such a finding may also damage our reputation and our relationships with regulators andcould restrict the ability of institutional investment managers to invest in our securities.We may not be able to obtain or maintain all necessary licenses, permits and approvals and to make all necessary registrations and filings forour activities in multiple jurisdictions and related to residents therein, especially in China or otherwise related to PRC residents.We operate in a heavily-regulated industry which requires various licenses, permits and approvals in different jurisdictions to conduct ourbusinesses. Our customers include people who live in jurisdictions where we do not have licenses issued by the local regulatory bodies. It ispossible that authorities in those jurisdictions may take the position that we are required to obtain licenses or otherwise comply with laws andregulations which we believe are not required or applicable to our business activities. If we fail to comply with the regulatory requirements, wemay encounter the risk of being disqualified for our existing businesses or being rejected for renewal of our qualifications upon expiry by theregulatory authorities as well as other penalties, fines or sanctions. In addition, in respect of any new business that we may contemplate, we maynot be able to obtain the relevant approvals for developing such new business if we fail to comply with the relevant regulations and regulatoryrequirements. As a result, we may fail to develop new business as planned, or we may fall behind our competitors in such businesses. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 9 of 194 Table of Contents8In addition, a significant portion of our technology research and development, management, supporting and other teams are based in China and asignificant portion of our customers are Chinese speaking people including PRC citizens. Our PRC subsidiaries and VIEs work closely with andprovide significant supporting services for our trading platform outside of China as well as teams in New Zealand, Hong Kong, Singapore, theUnited States and Australia. In the opinion of our PRC legal counsel, our current supporting activities in China do not require a securities brokeragelicense or permit under the existing PRC securities laws and regulations. However, new laws and regulations in connection with our businessactivities may be adopted from time to time. There may be substantial uncertainties regarding the interpretation and application of current or anyfuture PRC laws and regulations applicable to our business and that the PRC government or other governmental authorities may ultimately take aview that is inconsistent with the opinion of our PRC legal counsel. For instance, if certain of our activities in China were deemed by relevantregulators as provision of securities brokerage services, future brokerage services, securities or futures investment consulting services or stockoption brokerage business, we might be subject to licensing requirements from the China Securities Regulatory Commission (“CSRC”).In July 2016, the CSRC posted an investor alert on its website warning investors that except for certain investment channels approved by the CSRCunder the PRC laws, the CSRC has not approved any domestic or foreign institutions to provide services for domestic investors to participate inoverseas securities trading. In September 2016, we received a rectification notice issued by the Beijing branch of the CSRC. Following such notice,we took certain rectification measures in order to comply with the requirements set forth therein, and we provided written responses to suchauthority promptly. We communicate with the Beijing branch of the CSRC from time to time to ensure our business follow their requirements. Asof the date of this report, we have not received further written rectification requirements from the CSRC. For more details of the notice and ourrectification measures, please see Item 4.B “Business Overview —PRC Regulations Relating to Securities and Futures Brokerage Business.”However, we cannot assure you that we will not be subject to further investigation or scrutiny from regulators even though we had not yet receivedany negative opinion or penalty for the activities of our PRC entities or services provided to PRC investors so far. If we are required to makefurther rectifications, our business and financial condition could be materially and adversely affected. If we fail to receive required permits in atimely manner or at all, or obtain or renew any permits and certificates, we may be subject to fines, confiscation of the gains derived from our non-compliant activities, suspension of our non-compliant activities or claims for compensation of any economic loss suffered by our customers orother relevant parties.If our internal control over financial reporting or our disclosure controls and procedures are not effective, we may not be able to accuratelyreport our financial results, prevent fraud or file our periodic reports in a timely manner.We are required to include a management report on our internal control over financial reporting that contains management’s assessment of theeffectiveness of our internal control over financial reporting. Our management attaches great importance to the Group’s internal control system. Wehave evaluated and optimized the group’s internal control policies and activities in 2020, made great efforts towards creating an effective internalcontrol environment and increasing employees’ awareness and understanding of internal control guidelines, and will continue to makeimprovements on our internal control system, but we cannot guarantee that our internal control over financial reporting will always be effective.Moreover, when we are no longer an emerging growth company under the federal securities laws, our independent registered public accountingfirm will be required to issue an attestation report on the effectiveness of our internal control over financial reporting. Even if our managementconcludes that our internal control over financial reporting is effective, our independent registered public accounting firm may conclude that thereare material weaknesses or significant deficiencies with respect to our controls or the level at which our controls are documented, designed,operated, or reviewed. Material weaknesses have been identified by our auditor in the past and may be identified during the audit process or atother times.Prior to our initial public offering, we were a private company with limited accounting personnel and other resources with which to address ourinternal control and procedures over financial reporting. In the course of preparing our consolidated financial statements for 2018, 2019, and 2020,we and our independent registered public accounting firm identified two material weaknesses in our internal control over financial reporting andother control deficiencies for the fiscal years ended December 31, 2018, 2019, and 2020. As defined in the standards established by the U.S. Publiccompany Accounting Oversight Board, a “material weakness” is a deficiency, or combination of deficiencies, in internal control over financialreporting, such that there is a reasonable possibility that a material misstatement of our company’s annual or interim financial statements will not beprevented or detected in a timely manner. A “significant deficiency” is a deficiency, or a combination of deficiencies, in internal controls overfinancial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for the oversight of thecompany’s financial reporting. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 10 of 194 Table of Contents9The material weaknesses identified related to (i) insufficient accounting personnel with appropriate knowledge of U.S. GAAP and lack ofcomprehensive accounting policies and procedures in accordance with U.S. GAAP, and (ii) lack of a systematic risk assessment process overfinancial reporting. Neither we nor our independent registered public accounting firm undertook a comprehensive assessment of our internalcontrol under the Sarbanes-Oxley Act for purposes of identifying and reporting any weakness in our internal control over financial reporting. Hadwe performed a formal assessment of our internal control over financial reporting or had our independent registered public accounting firmperformed an audit of our internal control over financial reporting, additional control deficiencies may have been identified.We have taken several steps to remedy the identified material weaknesses, and we will continue to implement measures to assess and enhance ourinternal control in order to ensure compliance with Section 404 of the Sarbanes-Oxley Act. However, the implementation of these measures maynot fully address the deficiencies in our internal control over financial reporting. We are not able to estimate with reasonable certainty the costs thatwe will need to incur to implement these and other measures designed to improve our internal control over financial reporting.During the course of documenting and testing our internal control procedures, we may identify other weaknesses and deficiencies in our internalcontrol over financial reporting. In addition, if we fail to maintain the adequacy of our internal control over financial reporting, as these standardsare modified, supplemented or amended from time to time, we may not be able to conclude on an ongoing basis that we have effective internalcontrol over financial reporting. Generally speaking, if we fail to achieve and maintain an effective internal control environment, we could suffermaterial misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidencein our reported financial information. This could in turn limit our access to capital markets, harm our results of operations, and lead to a decline inthe trading price of our ADSs. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuseof corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminalsanctions.Violations of the relevant SAFE rules and regulations may give rise to regulatory inquiries, investigations or other actions, which may disruptour business and could materially and adversely impact our results of operations and financial condition.A significant portion of our customers are PRC citizens resident in China and are therefore subject to the restrictions imposed by the applicablerules and regulations promulgated by the State Administration of Foreign Exchange, or the SAFE, regarding the conversion of Renminbi intoforeign currencies and the remittance and use of such funds outside China. Under the current PRC foreign exchange regulations, each PRC citizenis permitted to convert up to an aggregate of US$50,000 equivalent Renminbi each year for appropriate personal use. Such appropriate use does notinclude direct investment into secondary stock markets. PRC citizens who intend to convert U.S. dollars exceeding such quota are required to gothrough additional application and review procedures with the relevant commercial banks designated by the SAFE. Despite our emphasis on ourcustomers’ compliance with the relevant rules and regulations in the agreements with customers on our platform, we cannot assure you that ourcustomers will follow the rules and regulations and the provisions in our agreements at all times. Any misbehavior or violation of our customers ofapplicable laws and regulations could lead to regulatory inquiries and investigations that involve us, which may affect our prospects.In connection with our customers’ transfer of funds, in March 2016, we received a notice from the SAFE requiring us to review and reportsituations regarding our customers’ account opening and fund transfers on our platform. Thereafter, the regulator conducted an onsite inspectioncollecting information on our customers’ compliance with the relevant SAFE rules and regulations since the inception of our business. Wesubmitted the relevant materials as requested by the regulator by the end of March 2016. In December 2016, the SAFE made another visit to ourcompany and we submitted some additional documents per its requirements. As of the date of this report, we have not received any furtherinquiries or notices from the SAFE regulators. For more details of the notice aforementioned and our measures in response thereto, please see Item4.B “Business Overview—PRC Regulations Relating to the Individual Foreign Exchange.” Since the PRC authorities and the commercial banksdesignated by the SAFE to conduct foreign exchange services have significant amount of discretion in interpreting, implementing and enforcing therelevant foreign exchange rules and regulations, and for many other factors that are beyond our control and anticipation, we may face more severeconsequences, including but not limited to being asked to take additional and burdensome measures to monitor the source and use of the foreigncurrency funds in the accounts of our customers or suspend our operations pending an investigation or indefinitely. As a result, our business, resultsof operations and financial condition may be materially and adversely affected. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 11 of 194 Table of Contents10Any future change in the regulatory and legal regime for the securities brokerage industry may have a significant impact on our businessmodel.Firms in the securities brokerage industry have been subject to an increasingly regulated environment over recent years, and penalties and finessought by regulatory authorities have also increased. This regulatory and enforcement environment has created uncertainties with respect to varioustypes of products and services that historically had been offered by us and that were generally believed to be permissible and appropriate. Ourmodel of operation and profitability may be directly affected by legislative changes in rules promulgated by government agencies and self-regulatory organizations in various jurisdictions that oversee our businesses, and changes in the interpretation or enforcement of existing laws andrules, such as the potential imposition of transaction taxes.In addition, to continue to operate and expand our services internationally, we may have to comply with the regulatory controls of each jurisdictionwhere we conduct, or intend to conduct business, the requirements of which may not be clearly defined. The varying compliance requirements ofthese different regulatory jurisdictions, which are often unclear, may limit our ability to continue existing international operations and furtherexpand our business internationally. For example, we face significant legal uncertainties as to whether the CSRC would require us to get certainlicenses or permits relating to our activities in China given the fact that most of our technology, customer services and administrative teams arebased in China, or whether the CSRC would view our current or previous business operations in China as non-compliant with the relevantregulatory regime. See Item 3.D “Risk Factors — Risks Related to Our Business and Industry—We may not be able to obtain or maintain allnecessary licenses, permits and approvals and to make all necessary registrations and filings for our activities in multiple jurisdictions and relatedto residents therein, especially in China or otherwise related to PRC residents.” We could be subject to disciplinary or other actions in the futuredue to claimed or deemed non-compliant, which could have a material adverse effect on our business, financial condition and results of operationsas further described under “—Non-compliance with applicable laws in certain jurisdictions could harm our business, reputation, financial conditionand results of operations.”Accusations or claims against us may adversely affect our business operations and reputation.We have been involved in cases or claims such as infringements upon reputation and intellectual property rights allegedly conducted by users onour platform, and portraiture right infringements based on the fact that we list some of our shareholders on our website. For other examples, pleasesee Item 3.D “Risk Factors — Risks Related to Our Business and Industry—We may not be able to obtain or maintain all necessary licenses,permits and approvals and to make all necessary registrations and filings for our activities in multiple jurisdictions and related to residents therein,especially in China or otherwise related to PRC residents.” Although the records of investigations or accusations did not necessarily lead tosanctions against us in a direct way, these historical records might be accessed online or offline, which could adversely affect our businessoperations and reputation, and thus further affect our progress if we decide to enter into new markets in these jurisdictions.A substantial portion of our business currently relies mostly on collaboration with our primary clearing agent, Interactive Brokers. Ourbusiness will be adversely impacted if we are unable to maintain our relationship with Interactive Brokers.We currently rely largely on Interactive Brokers to execute, settle and clear a substantial portion of the trades of the U.S. and Hong Kong stocksand other financial instruments, and to comply with certain federal, state and other laws, as discussed more fully in Item 4.B “Business Overview—Our Core Products and Services—Brokerage Services.” For the years ended December 31, 2018, 2019, and 2020, 96.8%, 78.4%, and 74.8% of ourtotal net revenues were executed and cleared by Interactive Brokers. For consolidated accounts, the information of which is not fully disclosed toInteractive Brokers, we receive commission fees and direct a pre-determined portion to Interactive Brokers. For fully disclosed accounts, everytime Interactive Brokers executes and clears a trade, it collects the commissions, deducts its pre-determined portion and returns the rest of thecommission fees to us. Customers can also trade on margin and short sell securities on our trading platform. We generate interest income arisingfrom margin financing offered by us to consolidated account customers and earn financing service fees related to the margin financing provided byInteractive Brokers to fully disclosed account customers. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 12 of 194 Table of Contents11Our agreements with Interactive Brokers are non-exclusive and do not prohibit Interactive Brokers from working with our competitors or fromoffering competing services. Interactive Brokers currently offers execution and clearing services for other online brokerage platforms and otheralternative brokers and also offers competing services on its own. Interactive Brokers could view that working with us is not in its best interest andhence decide to enter into exclusive or more favorable relationships with our competitors. In addition, Interactive Brokers may not perform asexpected under our agreements including potentially being unable to accommodate our projected growth in customer base and trading volume. Wecould in the future have disagreements or disputes with Interactive Brokers or other clearing agents, which could negatively impact or threaten ourrelationship.Interactive Brokers is subject to oversight by the SEC, the FINRA, the Board of Governors of the Federal Reserve System and other regulatoryauthorities in the U.S. and other jurisdictions and must comply with complex rules and regulations, licensing and examination requirements. We arean “introducing broker” to Interactive Brokers for fully disclosed accounts, and as such, we are subject to audit by Interactive Brokers and theFINRA with respect to our proprietary and customer accounts and are required to maintain such account information in such a manner as to enableInteractive Brokers and FINRA to specifically identify the accounts from our platform. We have broad indemnification obligations and exposureunder our agreements with Interactive Brokers related to the actions and inactions involving the consolidated accounts and fully disclosed accountsor other activities under the agreements with Interactive Brokers.In the event that our relationship with Interactive Brokers deteriorates, we may need to enter into alternative arrangements with different clearingagents. If Interactive Brokers were to suspend, limit or cease its operations or our relationship with Interactive Brokers were to otherwise terminate,we would need to implement a substantially similar arrangement with another clearing agent or curtail our operations. To date, we have notfrequently used any other backup clearing agents for execution and clearing services to the extent we use Interactive Brokers. Our relationshipswith such clearing agents are subject to a number of risks and may be subject to change or termination with appropriate notice.We believe that our relationship with Interactive Brokers is critical to our business. If we need to enter into alternative arrangements with adifferent clearing agent to replace our existing arrangements, we may not be able to negotiate a favorable alternative arrangement. Transitioning toa new clearing agent or increasing self-clearing through Marsco Investment Corporation (“Marsco”) are time-consuming and may affect the userexperience or, if our platform becomes inoperable, may result in our inability to facilitate trades through our platform. We would also need tocomply with applicable laws regarding execution and clearing services, which would be costly and time-consuming. If we are unsuccessful inmaintaining our relationships with Interactive Brokers, our operating cost and expenses might increase, which may materially and adversely affectour financial condition and results of operations.Self-clearing exposes us to significant operational, liquidity, financing and regulatory risks.We began self-clearing a portion of the trades of the U.S. stocks and other financial instruments in the third quarter of 2019, following ouracquisition of Marsco, and we expect to increase the proportion of such trades that we self-clear in the future. Self-clearing requires us to financetransactions and maintain margin deposits at clearing organizations.Clearing and execution services include the confirmation, receipt, settlement, delivery and record-keeping functions involved in securitiestransactions. Clearing brokers also assume direct responsibility for the possession or control of client securities and other assets and the clearing ofclient securities transactions. However, clearing brokers also must rely on third-party clearing organizations, such as the Depositary Trust ClearingCorporation and its subsidiaries in the United States, in settling client securities transactions. Clearing brokers are also responsible for protectingclient assets and complying with relevant customer protecting regulations. Clearing securities firms, such as Marsco, are subject to substantiallymore regulatory oversight and examination than introducing brokers who rely on others to perform clearing functions. Errors in performingclearing functions, including clerical and other errors related to the handling of funds and securities held by us on behalf of clients, could lead toregulatory fines and civil penalties as well as losses and liability in related legal proceedings brought by clients and others.We may be required to finance our clients’ unsettled positions and we could be held financially liable for the defaults of our clients. Although theseobligations are collateralized, we are subject to market risk in the liquidation of customer collateral to satisfy those obligations. Default by ourclients may also give rise to our incurring penalties imposed by execution venues, regulatory authorities and clearing and settlement organizations. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 13 of 194 Table of Contents12Regulatory agencies have required clearing and settlement organizations to increase the level of margin deposit requirements and they maycontinue to do so in the future. Growth in trading activity may lead to higher regulatory capital requirements. We cannot assure you that thesecapital requirements will be sufficient to protect market participants from a default or that we will not be adversely affected in the event of asignificant default.As a result, self-clearing exposes our business to operational risks, including business and technology disruption; operational inefficiencies;liquidity, financing and regulatory risks; and potentially increased expenses. We may encounter difficulties with self-clearing that lead to operatinginefficiencies, technology issues, dissatisfaction amongst our client base, disruption in the infrastructure that supports the business, inadequateliquidity, increased margin requirements with clearing organizations and third-party settlement agents who provide financing with respect totransactions, reductions in available borrowing capacity and financial loss. Any such delay, disruption, expense or failure could adversely affect ourability to effect transactions and manage our exposure to risk. Moreover, any of these events could have a material adverse effect on our business,financial condition and operating results.If we are unable to develop a diverse customer base and offer new and innovative products and services, our business, financial condition andresults of operation may be negatively impacted.Historically, we generated a significant portion of revenues through the provision of online brokerage services including commissions for executionof trades and interest income or financing service fees arising from or related to margin financing for our customers. Key success factors of theonline brokerage industry include expansion of products and services that add value to customers, acquisition of licenses in different jurisdictionsand enhancement of user experience. We intend to continue strengthening the innovation, security, efficiency and effectiveness of our brokerageservices, including our user-friendly interface, comprehensive functionalities and customer service capabilities and to expand our service offeringsto small and medium-sized institutional customers and increase the proportion of revenues generated from them. We have developed customizedapplication programming interface, or API, for our institutional customers. As institutional customers tend to trade more consistently and demand awider spectrum of services as compared to individual investors, we strive to foster long-term partnerships with them and to grow our revenuestreams substantially as a result of greater number of institutional customers utilizing our trading platform and services. We cannot guarantee thatwe will be successful in expanding our customer base, and if we are unable to do so, our growth prospects, financial condition and results ofoperation may be adversely affected.We also plan to continue integrating value-added services, including asset management and wealth management services as well as institutional andcorporate services to improve popularity and enhance customer stickiness and diversify revenue streams. We aim to provide asset management andwealth management services to a greater number of high net worth individuals as well as institutional and corporate customers. As we provide awider array of services, including ESOP, asset management and wealth management services, we expect to attract more institutional and corporatecustomers to engage us to provide such services and in turn generate more revenues. We expect our operating cost and expenses to continue toincrease as we provide more innovative and effective products and services. If we are unable to develop products and services that attract sufficientcustomers, our business, financial condition and results of operation may be adversely affected.If we are unable to operate in a cost-effective manner, our results of operation may be negatively impacted.Our ability to control costs and expenses relating to our operations affects our profitability. With the expansion of our business, we expect ouroperating cost and expenses to continue to increase, including employee compensation and benefits, marketing and branding and other costs andexpenses. The salary level in the fintech industry in and outside China has generally increased in recent years, and we offer competitive wages andother benefits to recruit and retain quality professionals. Employee compensation and benefits (excluding share-based compensation) increasedfrom US$21.5 million in 2018 to US$31.7 million in 2019 and US$44.0 million in 2020. In addition, we utilize various marketing tools, includingbranding on online and traditional channels, collaborating with business partners, hosting branding events and circulating branding materials, toattract new customers, retain our existing customers and increase our revenues. Our marketing and branding expenses were US$10.5 million,US$7.1 million and US$15.9 million in 2018, 2019 and 2020, respectively, accounting for 31.4%, 12.1% and 11.5%, respectively, of our totalrevenues for the same periods. If we are unable to operate in a cost-effective manner, our results of operations may be negatively impacted. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 14 of 194 Table of Contents13We rely on a number of external service providers for certain key market information and data, technology, processing and supportingfunctions.We rely on a number of external service providers for certain key market information and data, technology, processing and supporting functions.These include the services of market makers, exchanges and Interactive Brokers and other clearing agents and clearinghouses to execute and settlecustomer orders. We primarily contract with Interactive Brokers for execution and clearing of customer trades. Furthermore, external contentproviders provide us with financial information, market news, charts, option and stock quotes and other fundamental data that we offer tocustomers. These service providers face technical, operational and security risks of their own. Any significant failures by them, including improperuse or disclosure of our confidential customer, employee or company information, could interrupt our business, cause us to incur losses and harmour reputation. Particularly, we have contracted with Nasdaq, New York Stock Exchange and a few other institutions to allow our customers toaccess real-time market information data, which are essential for our customers to make their investment decisions and take actions. Any failure ofsuch information providers to update or deliver the data in a timely manner as provided in the agreements could lead to potential losses of ourcustomers, which will in turn affect our business operations and reputation.We cannot assure that the external service providers will be able to continue to provide these services to meet our current needs in an efficient andcost-effective manner, or that they will be able to adequately expand their services to meet our needs in the future. Some external service providerswhich have assets that are important to the services they provide us are located outside the United States, and their ability to provide these servicesis subject to risks from unfavorable political, economic, legal or other developments, such as social or political instability, changes in governmentalpolicies or changes in the applicable laws and regulations.An interruption in or the cessation of service by any external service provider as a result of system failures, capacity constraints, financialconstraints or problems, unanticipated trading market closures or for any other reason and our inability to make alternative arrangements in asmooth and timely manner, if at all, could have a material adverse effect on our business, results of operations and financial condition.Further, disputes might arise out of or in connection with the agreements regarding our or the service providers’ performance of the obligationsthereunder. To the extent that any service provider disagrees with us on the quality of the products or services, terms and conditions of the paymentor other provisions of such agreements, we may face claims, disputes, litigations or other proceedings initiated by such service provider against us.We may incur substantial expenses and require significant attention of management in defending against these claims, regardless of their merit. Wecould also face damages to our reputation as a result of such claims, and our business, financial condition, results of operations and prospects couldbe materially and adversely affected.We are dependent upon the cooperation agreements with a few third party platforms for a portion of our revenues and customers.We enter into revenue-sharing arrangements with third party platforms, pursuant to which those platforms allow us to interface with their owncustomers and receive a percentage of the fees paid by those customers who have transacted through our platform. Our agreements with thoseplatforms typically have a term of one to three years. There can be no assurance that our agreements with them will be extended or renewed aftertheir respective expiration or that we will be able to extend or renew such agreements on terms and conditions favorable to us. If any of theimportant platforms breaches its obligations under any of these agreements or refuses to extend or renew it when the term expires, we may lose allor a portion of the customer base of its network or we may not be able to continue to acquire new customers through that platform. Any terminationor deterioration of our relationship with an important platform, and any extension or renewal after the respective initial term of these agreements onterms and conditions less favorable to us would have a material adverse effect on our business, financial condition and results of operations. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 15 of 194 Table of Contents14We may pursue acquisitions or joint ventures that could present unforeseen integration obstacles, incur unpredicted costs or may not enhanceour business as we expected.We have made a few selective acquisitions recently to expand our business into new areas and jurisdictions. We may in the future continue topursue acquisitions and joint ventures as part of our growth strategy. Any future acquisition or joint venture may result in exposure to potentialliabilities of the acquired companies, significant transaction costs and present new risks associated with entering additional markets or offering newproducts and integrating the acquired companies or newly established joint ventures. Potential liabilities may arise from deficiencies in duediligence findings and deficient past track record results. For instance, in November 2018, Tiger Fintech Holdings completed the acquisition of100% of the equity interests in US Tiger Securities, Inc. In July 2019, Tiger Fintech Holdings, Inc. completed its acquisition of 100% of the equityof Marsco, a U.S online broker service platform that focuses on empowering self-directed investors with necessary tools to manage their portfolios.Such acquisitions made to expand our business, facilities and workforce will also involve costs and risks, such as potential labor disputes andcompliance costs and risks. There can be no assurance that we will be able to grow our acquired or invested businesses, or realize returns, benefitsof synergies and growth opportunities we expect in connection with such acquisitions.Moreover, we may not have sufficient management, financial and other resources to integrate companies we acquire or to successfully operate jointventures and we may be unable to profitably operate our expanded company structure. Additionally, any new business that we may acquire or jointventures we may form, once integrated with our existing operations, may not produce expected or intended results.Our business may be harmed by global events beyond our control, including overall slowdowns in securities trading. Our revenues andprofitability depend on trading volume and are prone to significant and unpredictable fluctuations.Like other brokerage and financial services firms, our business and profitability are directly affected by elements that are beyond our control, suchas economic and political conditions, broad trends in business and finance, changes in volume of securities transactions, changes in the markets inwhich such transactions occur and changes in how such transactions are processed. A weakness in equity markets, such as a slowdown causingreduction in trading volume in the United States and Hong Kong stocks and other financial instruments, has historically resulted in reducedtransaction revenues and would have a material adverse effect on our business, financial condition and results of operations. For example, thehighly volatile market conditions in March 2020 relating in part to COVID-19 and reductions in oil prices caused some of our clients to experiencefinancial losses. If we are unable to collect fees from, or recover margin loans made to, our clients as a result, our financial condition and results ofoperations may be adversely affected. Additionally, certain market participants may be overleveraged, which may exacerbate the effects of marketvolatility. In case of sudden, large price movements, such market participants are more likely to be unable to meet their obligations to brokers who,in turn, may not be able to meet their obligations to their counterparties. As a result, the financial system or a portion thereof could collapse, andthe impact of such an event could be catastrophic to our business.Our revenues depend substantially on our customers’ trading volume, which is influenced by the general trading activities in the securities tradingmarket. Securities trading faces competition from other investment products, such as wealth management products and peer-to-peer lending. Thesealternative investment products may divert investors from or reduce their activity levels in securities trading, which may adversely affect ourtrading volume, revenues and business.In addition, general trading activities in our industry are also directly affected by factors such as economic and political conditions, macro trends inbusiness and finance, investors’ interest level in securities trading and legislative and regulatory changes. Any of these factors or other factors mayreduce the trading activity level in securities trading industry and adversely affect our business and results of operations and cash flows. Events inglobal financial markets in recent years resulted in substantial market volatility and increased customer trading volume. However, any sustaineddownturn in general economic conditions or global equity markets could result in reduced customer trading volume and revenues. Severe marketfluctuations or weak economic conditions could reduce our trading volume and revenues and have a material adverse effect on our profitability. Asa result, period to period comparisons of our revenues and operating results may not be meaningful, and future revenues and profitability may besubject to significant fluctuations or declines. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 16 of 194 Table of Contents15Our business may be adversely affected by the COVID-19 pandemic.The COVID-19 pandemic, and the protective actions that we have taken and may take in the future in response to COVID-19 pandemic, haveresulted in business and operational disruption. Our management team is principally located in Beijing, China and Auckland, New Zealand and theU.S. A significant portion of our technology research and development and services, supporting and other teams are based in Beijing, China. Mostof our data centers are located in Hong Kong and Beijing, China. The COVID-19 pandemic has caused, and may continue to cause, us and certainof our business partners to implement temporary adjustment of work schemes allowing employees to work from home and adopt remotecollaboration. This pandemic has also caused the restrictions on our employees’ ability to travel. In addition, the major stock exchanges ouroperations rely on are in the U.S. and Hong Kong. Our operations could also be severely disrupted if the exchanges we operate on continue to beaffected by COVID-19. More broadly, the pandemic has dampened investor and business confidence in the regions where we operate, includingChina. In February and March of 2020, the COVID-19 pandemic caused dramatic volatility in securities markets, leading to a significant increasein uncertainty and a reduction in the global IPO market in the first quarter of 2020. While the global IPO market rebounded after the first quarter of2020, a prolonged or resurgent pandemic could further destabilize the market and lead to future additional trade disruptions. The extent to whichCOVID-19 impacts our results will depend on many factors and future developments, which are highly uncertain and unpredictable.Attrition of customer accounts and failure to attract new accounts could have a material adverse effect on our business, financial condition andresults of operations.Our customer base mainly comprises of individual customers. Although we offer services designed to educate, support and retain our customers,our efforts to attract new customers or reduce the attrition rate of our existing customers may not be successful. The number of customers on ourtrading platform depends on the usability and popularity of our trading platform as well as the industry outlook of the online brokerage business.Our customers’ trading volume is directly influenced by the demand for trading by individual investors, which is affected by the general social andeconomic conditions, as well as individual investors’ preference for the choice of investment products. In addition, customers’ trading activities areinfluenced by the trading price volatility of the relevant products.Additionally, we have a large and highly engaged customer base, which drives our revenue growth. Our ability to continue to effectively maintainand expand our customer base will affect the growth of our business and our revenues going forward. Our total customer accounts increased from502,352 as of December 31, 2018 to 649,016 as of December 31, 2019 and 1,104,113 as of December 31, 2020. The significant increase in totalcustomer accounts led to the rapid growth in our revenues, which increased from US$33.6 million in 2018, by 74.8% to US$58.7 million in 2019,and by 136.1% to US$138.5 million in 2020. Furthermore, the level of customer engagement affects our commissions, interest income andfinancing service fees. Trading volume increased from US$119.2 billion in 2018 to US$219.1 billion in 2020. Our ability to expand our customerbase, including expansion into new markets including the United States, Australia, Hong Kong and Singapore, as well as maintain and enhancecustomer engagement, depends on, among other things, our ability to continuously provide comprehensive and user-friendly online tradingexperience. If we were unable to maintain or increase our customer retention rates or generate new customers in a cost-effective manner, ourbusiness, financial condition and results of operations would likely be adversely affected. Historically, we incurred US$10.5 million, US$7.1million and US$15.9 million in marketing and branding expenses, representing 31.4%, 12.1%, and 11.5% of our total revenues in 2018, 2019 and2020, respectively. Although we have spent significant financial resources on marketing expenses and plan to continue doing so, these efforts maynot be cost-effective to attract new customers. We cannot assure you that we will be able to maintain or grow our customer base in a cost-effectiveway. If we are unable to maintain high quality services, or maintain or reduce our service fee rate, or introduce new products and services, we mayfail to attract new customers or lose our existing customers, which could adversely affect our growth and profitability. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 17 of 194 Table of Contents16If we are unable to earn commissions for brokerage services and interest income or financing service fees for margin financing, our results ofoperation may be negatively impacted.We charge commission fees for the brokerage services we deliver to our customers. We also earn interest income or financing service fees arisingfrom or related to margin financing provided by ourselves or third parties to our customers for trading activities. Our ability to earn commissionfees, interest income or financing service fees largely depends on the number of customers on our trading platform and their trading volume.Additionally, our ability to extend margin financing to our customers largely depends on the amount of funds we can allocate internally and obtainfrom external sources, such as potential borrowings on revolving credit facilities. In connection with the significant growth in our consolidatedaccount customers, we expect to generate more interest income from margin financing offered to our customers. If we are unable to extend marginfinancing and earn commission fees, interest income or financing service fees, or if there is a reduction in our fee rates, our results of operationsmay be adversely affected. Additionally, market volatility or declines may cause our clients to experience losses, which may result in a higher rateof client defaults. If we are unable to recover funds due from our clients, our results of operations and financial condition will be adverselyaffected.Our current level of commission and fee rates may decline in the future. Any material reduction in our commission or fee rates could reduceour profitability.We derive a significant portion of our revenues from commissions and fees paid by our clients for trading securities through our platform.Commission fees generated from our brokerage services accounted for US$26.0 million, US$26.7 million and US$77.6 million in 2018, 2019 and2020, respectively. We may experience pressure on our commission or fee rates as a result of competition we face in the online brokerage serviceindustry. Some of our competitors offer a broader range of services to a larger client base and enjoy higher trading volumes than we do.Consequently, our competitors may be able and willing to offer trading services at lower commission or fee rates than we currently offer or may beable to offer. For example, some brokers in Hong Kong and the United States offer zero commission fees or similar policies to attract retailsecurities investors. As a result of this pricing competition, we could lose both market share and revenues. We from time to time award discountedor even zero commission fees to new or existing customers as part of our marketing scheme, thus attracting more customers and boosting customerstickiness. We believe that any downward pressure on commission or fee rates would likely continue and intensify as we continue to develop ourbusiness and gain recognition in our markets. A decline in our commission or fee rates could lower our revenues, which would adversely affect ourprofitability. In addition, our competitors may offer other financial incentives such as rebates or discounts in order to induce trading in their systemsrather than in ours. If our commission or fee rate decreases significantly, our operating and financial results may be materially and adverselyaffected.Failure to comply with regulatory capital requirements set by local securities regulatory authorities and agencies could materially andnegatively affect our financial condition and results of operations.Some of our subsidiaries are required to comply with regulatory capital requirements. For example, our major operating subsidiary Tiger Brokers(NZ) Limited (“TBNZ”) is currently registered in New Zealand to provide brokerage services. Our subsidiary US Tiger Securities, Inc. is aregistered broker-dealer in the United States. Wealthn LLC, another of our subsidiaries, is a registered investment advisor in the United States and amember of the National Futures Association, or the NFA. Stringent rules with respect to the maintenance of specific levels of net capital bysecurities broker-dealers or investment advisory firms have been adopted by many regulatory authorities and agencies such as the NZX, the SEC,the FINRA, the U.S. Commodity Futures Trading Commission, or the CFTC, and the NFA. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 18 of 194 Table of Contents17Tiger Brokers (NZ) Limited is contractually obliged to adhere to the terms and conditions of the NZX participant rules at all times, including whenits designation as a market participant is suspended, as it is now. For more information, see the disclosure under item 4. “Regulation- New ZealandRegulations Relating to Securities and Futures Brokerage Business.” The rules set out the requirements for calculating, recording, reporting andcomplying with the NZX capital adequacy requirements. Net capital is generally a measure of the sum of tangible assets less the sum of liabilities,except, approved subordinated debt, calculated in accordance with Generally Accepted Accounting Practice. NZX’s minimum net current tangibleassets requirement is the higher of NZ$0.5 million and a total risk requirement depending on the risk exposures with our available liquid capitaltaken into consideration. The rules require us to at all times maintain the net current tangible assets at a level no lower than the prescribedminimum capital adequacy, and to calculate and record on each business day our net current tangible assets as a percentage of our prescribedminimum capital adequacy by the end of the following business day. For more details, please see Item 4.B. “Business Overview—RiskManagement—Trading-Related Risks.”US Tiger Securities, Inc. must comply with the SEC’s net capital requirements, by which its current financial health is measured by assessing itsliquidity against the risks where it has exposure. At all times US Tiger Securities, Inc. must maintain its net capital requirements, at a level equal to,or greater than, the prescribed minimum capital. US Tiger Securities, Inc. must maintain a minimum net capital requirement in compliance with theSEC Rule 15c3-1 as well as comply with the SEC Rule 17a-11 and the “early warning levels” for net capital requirements contained therein.If we fail to comply with applicable New Zealand, U.S. and Singapore capital adequacy requirements, we will be forced to suspend our businessoperations until such time as we have injected enough capital to comply with applicable rules and regulations. For example, failure to comply withthe capital adequacy requirement, or failure to record the daily capital adequacy calculation, could result in the NZX taking measures to increaseour reporting requirements or restrict our service provision until the situation is remedied to its satisfaction. Additionally, the regulators couldsuspend or revoke our registration, expel us from membership, or impose censures, fines or other sanctions. If the net capital requirements arechanged or expanded, or if there is an unusually large charge against net capital, then our operations that require capital could be limited, and wemay not be able to pay dividends. A large operating loss or charge against net capital could have a material adverse effect on our ability to maintainor expand our business.We face risks related to our status as an anti-money laundering reporting entity in New Zealand and if the Financial Markets Authority findsfault with our AMLCFT programs and engages in enforcement actions against us, our business and reputation may be adversely affected.Some of our subsidiaries are required to comply with regulatory anti-money laundering requirements. For example, TBNZ was visited by the FMAfor an Anti-Money Laundering/Combating the Financing of Terrorism (“AMLCFT”) inspection in October 2019. In April 2020, FMA had issued aformal public warning (the “Warning Letter”), which identified potential violations of the AMLCFT caused by historical control weaknesses. TheFMA provided a list of remedial actions which TBNZ must complete to ensure compliance with the AMLCFT legislation. TBNZ, with theassistance of professional advisers, had completed all actions required in the Warning Letter by September 30, 2020 as confirmed by the FMA.Since the publication of the Warning Letter, the FMA has also taken a number of steps, including seeking, on a private basis, the production byTBNZ of certain documents and information. TBNZ is cooperating with the FMA and has responded to the FMA’s requests with the assistance ofprofessional advisers, including New Zealand counsel. TBNZ cannot predict the duration, outcome, or impact of the FMA investigation. Accordingto the Warning Letter, the FMA reserves its right to pursue civil enforcement actions against TBNZ, including but not limited to civil penalties forany breach of the AMLCFT Act caused by historical control weaknesses. Each pecuniary penalty ordered could be up to NZ$2 million. There canbe no assurance that the FMA will not take further enforcement action against us for past violation. If the FMA engages in enforcement actionsagainst us, our business and reputation may be adversely affected.Failure to comply with applicable rules and regulations relating to segregation of customer funds may have a material adverse effect on ourbusiness, results of operations, financial condition, or reputation.Certain of our subsidiaries are subject to rules and regulations relating to the segregation of customer funds from our internal funds, set by localsecurities regulatory authorities and agencies, in the jurisdictions in which they operate. For example, TBNZ is subject to such rules in NewZealand. If we fail to segregate our customer funds from our internal funds in accordance with applicable rules and regulations, we may be subjectto regulatory action including private or public censure, fines, or other legal action, which may have an adverse effect on our business, financialcondition, or reputation. As we increase the number of consolidated accounts, we also expect cash segregated for regulatory purposes and payablesto customers on our balance sheet to increase significantly. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 19 of 194 Table of Contents18A failure in our information technology, or IT, systems could cause interruptions in our services, undermine the responsiveness of our services,disrupt our business, damage our reputation and cause losses.Our IT systems support all phases of our operations, including marketing, customer development and the provision of customer support services,and are an essential part of our technology infrastructure. Our technology infrastructure and compliance capabilities are critical for us to offer highquality products and services as well as to retain and attract users and customers. They also enable us to facilitate secure, fast and cost-efficientfinancial transactions on our platform. We must continue to upgrade and expand our technology infrastructure and to strengthen our compliancesystem to keep pace with the growth of our business and to develop new features and services for our users and customers. With the continuousimprovement of our technology infrastructure and compliance capabilities, we are able to serve more consolidated accounts. In 2016 and 2017, allor substantially all of the accounts on our trading platform were fully disclosed accounts pursuant to which we record commissions after InteractiveBrokers deducted the execution and clearing expenses and returned the rest of the commission fees to us. In 2018, 2019 and 2020, we experiencedrapid growth in the number of consolidated accounts and self-clearing accounts. In connection with the growth of consolidated accounts, we expectour revenues to increase because the revenues for consolidated accounts are recognized on a gross basis including the full amount paid bycustomers while the revenues for fully disclosed accounts are recognized on a net basis after deducting the execution and clearing expenses paid toInteractive Brokers. On the other hand, we expect our operating costs and expenses to increase as well due to the increase in execution and clearingexpenses paid to Interactive Brokers. We also expect cash segregated for regulatory purposes and payables to customers on our balance sheet toincrease significantly as a result of such growth. We will invest more resources on customer verification, record keeping, compliance and trading-related functions for consolidated accounts whereas Interactive Brokers has been responsible for certain of these functions for fully disclosedaccounts. Our ability to serve more consolidated accounts, depends on, among other things, our ability to support all aspects of customerverification, record keeping and compliance functions using our technology and human resources.If our systems fail to perform, we could experience disruptions in operations, slower response time or decreased customer satisfaction. We mustprocess, record and monitor a large number of transactions and our operations are highly dependent on the integrity of our technology systems andour ability to make timely enhancements and additions to our systems. System interruptions, errors or downtime can result from a variety of causes,including changes in customer usage patterns, technological failures, changes to our systems, linkages with third-party systems and power failures.Our systems are vulnerable to disruptions from human error, execution errors, errors in models such as those used for risk management andcompliance, employee misconduct, unauthorized trading, external fraud, computer viruses, distributed denial of service attacks, computer virusesor cyberattacks, terrorist attacks, natural disaster, power outage, capacity constraints, software flaws, events impacting key business partners andvendors, and similar events.It could take an extended period of time to restore full functionality to our technology or other operating systems in the event of an unforeseenoccurrence, which could affect our ability to process and settle customer transactions. Moreover, instances of fraud or other misconduct might alsonegatively impact our reputation and customer confidence in us, in addition to any direct losses that might result from such instances. Despite ourefforts to identify areas of risk, oversee operational areas involving risks, and implement policies and procedures designed to manage these risks,there can be no assurance that we will not suffer unexpected losses, reputational damage or regulatory actions due to technology or otheroperational failures or errors, including those of our vendors or other third parties.While we devote substantial attention and resources to the reliability, capacity and scalability of our systems, extraordinary trading volume couldcause our computer systems to operate at unacceptably slow speeds or even fail, affecting our ability to process customer transactions andpotentially resulting in some customers’ orders being executed at prices they did not anticipate. Disruptions in service and slower system responsetime could result in substantial losses and decreased customer satisfaction. We are also dependent on the integrity and performance of securitiesexchanges, clearinghouses and other intermediaries to which customer orders are routed for execution and clearing. System failures and constraintsand transaction errors at such intermediaries could result in delays and erroneous or unanticipated execution prices, cause substantial losses for ourcustomers and for us, and subject us to claims from our customers for damages. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 20 of 194 Table of Contents19While we currently maintain a disaster recovery and business continuity plan, which is intended to minimize service interruptions and secure dataintegrity, our plan may not work effectively during an emergency. The information technology system failure may lead to interruption of ouroperations, which in turn will prevent our customers from trading and hence significantly reduce customer satisfaction and confidence in us, causeloss or reduce potential gain for our customers, or cause regulatory authorities’ investigation and penalization. Any such system failure couldimpair our reputation, damage our brand, subject us to claims and materially and adversely affect our business, financial condition, operatingresults or prospects.If we fail to keep our technology updated as the industry evolves, our growth, revenues and business prospects may be materially and adverselyaffected.Our proprietary trading platform and customer relationship management system are critical to our business operations. In order to remaincompetitive, our proprietary technology is under continuous development and upgrade. If we fail to keep our technology updated as needed or asfast as our competitors or in a cost-effective manner, we may lose our competitiveness against our competitors. Failure to compete may limit ourservice quality, lower customer confidence in us or otherwise adversely affect our business and prospects.We may not be able to protect our intellectual property rights.We rely on a combination of trademark, copyright, trade secret and fair business practice laws in and outside of China to protect our proprietarytechnology, intellectual property rights and brand. We have not registered some of the names, logos and characters of our platform and products astrademarks, which may adversely affect our reputation, business, financial condition and results of operations, if others register the same or similarterms as their own trademarks. Although we have submitted trademark applications for the names, logos and characters of our platform andproducts such as “Tiger Brokers”, in jurisdictions for existing and potential business, there is no guarantee that our applications will be approved bythe relevant authorities. Although we have adopted strict internal policies and have entered into confidentiality and invention assignmentagreements with certain of our employees and/or relevant third parties and also rigorously control access to proprietary technology, it is possiblethat third parties may copy or otherwise obtain and use our proprietary technology without our authorization or otherwise infringe on our rights. Wemay also face claims of infringement that could interfere with our ability to use technology that is material to our business operations.We may also have to rely on litigation to enforce our intellectual property rights, protect our trade secrets, determine the validity and scope of theproprietary rights of others or defend against claims of infringement or invalidity, and may also have to attend litigation initiated against us. Anysuch litigation, whether successful or unsuccessful, could result in substantial costs and the diversion of resources and the attention of management,any of which could adversely affect our business. In addition, we may have to enter into royalty or licensing agreements where there can be noassurance that such licenses would be available on reasonable terms, if at all, and the settlement of these claims could have a material adverse effecton our business, financial condition and operating results.We are subject to counterparty risk whereby defaults by parties with whom we do business can have an adverse effect on our business, financialcondition and results of operations.In our brokerage business, we are exposed to customer margin credit risk even though we automatically evaluate each account throughout thetrading day and close out positions automatically for accounts that are found to be under-margined. Our policy of evaluating accounts and closingpositions for accounts that are found to be underfunded may not be effective in situations in which no liquid market exists for the relevant securitiesor commodities or in which, for any reason, automatic liquidation for certain accounts has been disabled. If no liquid market exists or automaticliquidation has been disabled, we are subject to risks inherent in extending credit, especially during periods of rapidly declining markets. Any lossor expense incurred due to defaults by our customers in failing to repay margin loans or to maintain adequate collateral for these loans would causeharm to our business, financial condition and results of operations. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 21 of 194 Table of Contents20We may be subject to intellectual property claims from others and applicable administrative penalties.We may in the future receive notices of claims for infringing upon other parties’ intellectual property rights. There can be no assurance that claimsfor infringement or invalidity (or claims for indemnification resulting from infringement claims) will not be asserted or prosecuted against us. Toprovide the user community with the latest news and online content, our community website (laohu8.com) was previously programmed toautomatically collect and use certain contents provided by third parties without the appropriate authorization or license. Further, some of our usersmight repost the contents produced by third parties without authorization on our trading platform. The contents created by third parties andpublished by us or our users could lead to infringement claims. We may also be subject to administrative penalties brought by the NationalCopyright Administration in China or its local branches for alleged copyright infringement.We may not be able to promptly identify and remove all contents that may infringe upon third-party rights. Moreover, some right owners might notsend us a notice before bringing a lawsuit against us. Thus, our failure to identify unauthorized contents posted on our trading platform can subjectus to claims for infringement of third-party intellectual property rights or other rights. Even if we can and have removed all unauthorized contentand are in the process of negotiating the license or permit, pursuant to the provisions of applicable laws and regulations, we believe our pastviolations or infringement might still expose us to potential claims or liabilities.We may fail to protect our platform from cyber-attacks, which may adversely affect our reputation, customer base and business.Despite our efforts to safeguard the information of our customers, system malfunctions, employee errors, misconducts or other factors may stilloccur, which may lead to Internet security emergency. Our computer system, the networks we use, the networks and online trading platforms of theexchanges and other third parties with whom we interact, are potentially vulnerable to physical or electronic computer break-ins, viruses andsimilar disruptive problems or security breaches. A party that is able to circumvent our security measures could misappropriate proprietaryinformation or customer information, jeopardize the confidential nature of the information we transmit over the Internet and mobile network orcause interruptions in our operations. Also see Item 3.D “Risk Factors — Risks Related to Our Business and Industry—If we fail to protectcustomer data and privacy, our reputation, financial condition and results of operations will be materially and adversely affected.” We or ourservice providers may be required to invest significant resources to protect against the threat of security breaches or to alleviate problems caused byany breaches. To the extent that our activities involve the storage and transmission of proprietary information and personal financial information,security breaches could expose us to risks of financial loss, litigation and other liabilities. Any of these events, particularly if they result in a loss ofconfidence in our services, could have a material adverse effect on our reputation, business, financial condition and results of operations.If we fail to protect customer data and privacy, our reputation, financial condition and results of operations will be materially and adverselyaffected.We are dependent on information technology networks and systems to securely process, transmit and store electronic information and tocommunicate among our locations and with our customers and partners. Due to the volume and sensitivity of the personal information andcustomer data we manage and the nature of our brokerage services and ESOP management services, the security features of our platform andinformation systems are critical. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 22 of 194 Table of Contents21We have adopted security policies and measures, including encryption technology, to protect our proprietary data and customer’s privacy. Allcustomer and transaction data are saved in our own database and operating systems. Only database administrators with the proper authorizationhave access to the database. In addition, all employees should sign non-disclosure agreements when they join and leave our company. However, wecannot guarantee our employees will not breach the non-disclosure agreements in the future. Further, as the breadth and complexity of theinfrastructure of our platform continues to grow, the potential risk of system breakdown or function failure increases and it is the same for thepotential risk of security breaches and cyber-attacks such as viruses, malware or phishing attempts by cyber criminals or other wrongdoers seekingto steal our customer’s data for financial gain or to harm our business operations or reputation. Further, if any person, including any of ouremployees, negligently disregards or intentionally breaches our established controls with respect to customer data, or otherwise mismanages ormisappropriates that data, we could be subject to significant monetary damages, regulatory enforcement actions, fines or even criminal prosecutionin one or more jurisdictions. Unauthorized disclosure of sensitive or confidential customer data, whether through system failure, employeenegligence, fraud or misappropriation, could damage our reputation and cause us to lose customers. Cyber-attacks could also adversely affect ouroperating results, consume internal resources, and result in litigation or potential liabilities for us and otherwise harm our business. We havereceived several complaints from our customers regarding the leakage of their personal information. Although we have conducted investigation onsuch leakage, we cannot guarantee that there will not be other similar incidents and complaints. Further, our security management programs arereviewed annually, and therefore, we cannot ensure that such programs will be updated promptly.In addition, by virtue of third party channels, our corporate customers utilize our technology to serve their own customers. Consequently, any leakor abuse of customer data by our third party channels may be perceived by the customers as a result of our failure to protect the customer data andprivacy. Any failure or perceived failure by us to prevent information security breaches or to comply with privacy policies or privacy-related legalobligations, or any compromise of security that results in the unauthorized release or transfer of personally identifiable information or othercustomer data, could cause our customers to lose trust in us and could expose us to legal claims.A growing number of legislative and regulatory bodies have adopted consumer notification requirements in the event of unauthorized access to oracquisition of certain types of personal data. Such breach notification laws continue to evolve and may be inconsistent from one jurisdiction toanother, which might become a particular concern as we accelerate our international expansion.In China, the government is still ramping up regulations with regard to personal information protection. On October 1, 2020, the InformationSecurity Technology – Personal Information Security Specification (GB/T 35273-2020) (“2020 Specification”) took effect. Although the 2020Specification is a recommended guideline, and it is not enforceable by law, the authority will use this standard to evaluate our compliance withChina’s legal guidelines and regulations regarding personal information protection. Besides, Personal Information Protection Law drafted bySCNPC, which is still in the process of being reviewed, may become the most relevant law in China regarding personal information protection. ThePersonal Information Protection Law provides serve punishment for those who violates regulations when processing personal information. Fordetails of the relevant PRC Laws, please refer to the section “Regulations on Privacy Protection” below. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 23 of 194 Table of Contents22In addition, laws and regulations in certain jurisdictions impose specific regulatory requirements on cross border transmission of important personaldata. For instance, the Cyber Security Law of the PRC, which was promulgated by the Standing Committee of the National People’s Congress, orthe SCNPC and became effective on June 1, 2017, requires operators of key information infrastructures, which include, among others, publiccommunications and information service and financial industry and other important industries and fields, shall store personal information andimportant data gathered and produced during operations in China within the territory of China. Where such information and data need to betransmitted overseas based on commercial demand, a security assessment shall be conducted in accordance with the measures formulated by thenational cyberspace administration authority in concert with the relevant departments under the State Council. However, there are no detailedmeasures published on how such security assessment shall be conducted. Although all of the data centers used for our brokerage service are locatedoverseas, we have several servers located in China to provide user community support and market information. We might need to transmit certainpersonal data between different locations, and since such data are used for financial services, we might be subject to security assessmentrequirements as set forth in the Cyber Security Law of the PRC. In addition, we are subject to domestic and international laws relating to thecollection, use, retention, security and transfer of personally identifiable information among us and our international subsidiaries. Non-compliancecould result in significant penalties or legal liability. Foreign data protection, privacy, and other laws and regulations can impose differentobligations or be more restrictive that those in mainland China. Regulatory authorities around the world are considering a number of legislative andregulatory proposals concerning data protection. Also, the interpretation and application of consumer and data protection laws in the U.S., Europeand elsewhere are often uncertain. It is possible that these laws may be interpreted and applied in a manner that is inconsistent with our datapractices. These legislative and regulatory proposals, if adopted, and such interpretations could, in addition to the possibility of fines, result in anorder requiring that we change our data practices, which could have an adverse effect on our business and results of operations. For example, theGeneral Data Protection Regulation (GDPR), which came into application in the European Union (EU) on May 25, 2018, applies to all of ouractivities conducted from an establishment in the EU or related to products and services that we offer to EU users. The GDPR created a range ofnew compliance obligations, which could cause us to change our business practices, and significantly increased financial penalties for non-compliance.We cannot assure that the measures we currently adopt to assess the personal data security could satisfy the requirements of the relevantgovernmental authorities or any future measures when published. Further, to comply with those obligations will incur substantial costs and couldincrease negative publicity surrounding any incident that compromises user data. Although we have made substantial efforts to ensure ourcompliance with the applicable privacy regulations in various jurisdictions, we may not be capable of adjusting our internal policies in a timelymanner and any failure to comply with applicable regulations could also result in regulatory enforcement actions against us.We face risks related to potential insider trading, money laundering and securities fraud conducted by our customers which we cannot fullyeliminate.Although our customer agreements require customers to acknowledge that they will observe all insider trading, money laundering and securitiesfraud laws and regulations in applicable jurisdictions and to assume liabilities for all restrictions, penalties and other responsibilities arising fromconducts suspected to constitute insider trading, money laundering and/or, securities fraud, we cannot verify whether every transaction conductedby our customers is in compliance with such laws and regulations because our customers may circumvent our due diligence measures to commitinsider trading and/or money laundering. In addition, we will review to see if our customers are politically exposed persons or on certain sanctionlists (including but not limited to the lists of money laundering, terrorist financing or other crimes) through search systems provided by third-partysuppliers. However, we may still be subject to certain legal or regulatory sanctions, fines or penalties, financial loss, or damage to reputationresulting from the failure of our customers to comply with insider trading and/or money laundering laws and regulations in the relevantjurisdictions. Also see Item 3.D “Risk Factors — Risks Related to Our Business and Industry—We face risks related to our status as an anti-moneylaundering reporting entity in New Zealand and if the Financial Markets Authority finds fault with our AMLCFT programs and engages inenforcement actions against us, our business and reputation may be adversely affected.” Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 24 of 194 Table of Contents23We face risks related to our KYC procedures when our customers provide outdated, inaccurate, false or misleading information.We collect user information during the account opening and registration process and screen accounts against public databases for purpose ofverifying customer identity and detecting risks. Although we require our customers to submit documents for proof of their identity and address forcompleting the account registration and to update such information from time to time, we face risks as the information provided by our customersmay be outdated, inaccurate, false or misleading. We cannot fully confirm the accuracy, currency and completeness of such information beyondreasonable effort. For example, a substantial portion of our customers are holders of the PRC identity card. Because the PRC identity cards areusually effective for more than ten years or some may have no expiration term, customers may have changed their domicile or citizenship, thusmaking them subject to applicable laws and regulations of jurisdictions other than PRC such as the U.S. In this situation, despite our effort toexclude persons who reside in jurisdictions where we have no license or permit such as the United States before the completion of the acquisitionof US Tiger Securities, Inc., our provision of products and services to such customers could be in violation of the applicable laws and regulations inthose jurisdictions, of which we may have no awareness until we are warned by the relevant supervising authorities. Despite our safeguards, wecould still be subject to certain legal or regulatory sanctions, fines or penalties, financial loss, or damage to reputation resulting from suchviolations.In addition, although we and our vendors have strict internal policies for continuing KYC procedures after the activation of accounts and for issuessuch as anti-corruption, economic sanctions, anti-money laundering, export controls and securities fraud, we mainly rely on our continuing KYCprocedures to ensure our compliance with relevant laws and regulations related to anti-corruption, economic sanctions, anti-money laundering,export controls and securities fraud. Although we have relevant trainings for our employees in all of our departments and, notably on a biweekly ortriweekly basis for employees in the customer service department, our KYC system and procedures cannot be foolproof. Any potential flaw in ourKYC system or any misconduct in the KYC procedures by any of our employees may also lead to our failure of compliance with such relevantlaws and regulations, which will further subject us to certain legal or regulatory sanctions, fines or penalties, financial loss, or damage to reputation.Also see Item 3.D “Risk Factors — Risks Related to Our Business and Industry—We face risks related to our status as an anti-money launderingreporting entity in New Zealand and if the Financial Markets Authority finds fault with our AMLCFT programs and engages in enforcementactions against us, our business and reputation may be adversely affected.”We cannot guarantee the profitability of our customers’ investment or ensure that our customers can make rational investment judgement.Similar to other brokerage and financial services providers, we cannot guarantee the profitability of the investments made or accessed by customerson or through our trading platform or Fund Mall. The profitability of our customers’ investment is directly affected by elements beyond ourcontrol, such as economic and political conditions, broad trends in business and finance, changes in volume of securities and futures transactions,changes in the markets in which such transactions occur and changes in how such transactions are processed.Moreover, although we currently set a minimum deposit requirement of US$2,000 to open and maintain a margin fully disclosed account and self-clearing accounts, a substantial portion of our customers are retail investors who are less sophisticated compared with institutional investors. Weprovide a forum to facilitate the provision of financial and market information, and live market commentaries. Although these materials andcommentaries contain prominent disclaimers, our customers may seek to hold us responsible when they use such information to make tradingdecisions and suffer financial loss on their trades, or if their trades are not as profitable as they have expected. Furthermore, it is possible that somecustomers could solely rely on certain predictive statements made by other customers on our trading platform, ignoring our alert warnings thatcustomers should make their own investment judgement and should not predict future performance based on historical records. As a result, thefinancial loss of our customers will inevitably affect our performance in terms of transaction volumes and revenues as customers decide to aborttrading. In addition, some customers who have suffered substantial losses on our platform may blame our platform, seek to recover their damagesfrom us or bring lawsuits against us. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 25 of 194 Table of Contents24If our reputation, or the reputation of our industry as a whole, is harmed, or the reputation of the industry as a whole is damaged, our business,financial condition, results of operations or prospects may be materially and adversely affected.Our ability to attract and retain customers may be adversely affected if our reputation, or the reputation of our industry as a whole, is damaged. Ifwe fail, or appear to fail, to deal with issues that may give rise to reputational risk, our business and prospects may be harmed. These issuesinclude, but are not limited to, mishandling customer complaints, potential conflicts of interest, privacy breaches, customer data leak, impropersales practices, as well as failure to identify legal, credit, liquidity, and market risks inherent in our business. Failure to appropriately address theseissues could reduce customer confidence in us or increase customer attrition rate, which may adversely affect our reputation and business.In addition, our ability to attract and retain customers may be adversely affected if the reputation of the industry as a whole is damaged. Theperception of insufficient regulation and unfavorable reputation within the industry could materially and adversely affect our ability to attract andretain customers. Any fraudulent or allegedly fraudulent activities in the securities brokerage industry, which is beyond our control, may damagethe reputation of the entire industry and may adversely affect our business operations and reputation.We depend on key management as well as experienced and capable personnel, and our business may be adversely affected if we are unable tohire and retain qualified employees.Our key management includes our Chief Executive Officer or CEO, Mr. Tianhua Wu, our Chief Financial Officer or CFO, Mr. John Fei Zeng, andour Chief Compliance Officer, Ms. Katherine Wei Wu. Our continued success is dependent upon the hire and retention of these key managementmembers, as well as a number of other key managerial, marketing, sales, research, technical and operations personnel, and continuous recruitmentof experienced and capable personnel. We do not have key man insurance and the loss of such key personnel could have a material adverse effecton our business. In addition, our ability to grow our business is dependent, to a large degree, on our ability to hire or retain such key managementmembers and experienced personnel. If we lose any of our key management team members or fail to attract and retain professional personnel, wemay not be able to execute our existing business strategies effectively or deliver excellent services to our customers, and our business, reputation,financial condition and results of operations could be materially and adversely affected.We have exposure to interest rate risk.As a part of our business, we invest in interest-earning assets and are obligated on interest-bearing liabilities. Interest rate fluctuations primarilyaffect our interest income and interest expenses. We earn interest income primarily from margin financing and securities borrowing and lendingtransactions and make interest payments on deposits we hold on behalf of our customers and borrowings provided by Interactive Brokers and othercommercial lenders. Changes in interest rates could affect the interest earned on assets differently than interest paid on liabilities. A rising interestrate environment generally results in a larger net interest spread. Conversely, a falling interest rate environment generally results in a smaller netinterest spread. Our most prevalent form of interest rate risk is referred to as “gap” risk. This risk occurs when the interest rates we earn on assetschange at a different frequency or scale than the interest rates we pay on liabilities. If we are unable to effectively manage our interest rate risk,changes in interest rates could have a material adverse effect on our profitability. Additionally, if we are not able to secure additional funding in thefuture from our existing counterparties or others on favorable terms or at all, our financial condition, growth prospects, and results of operationsmay be adversely affected.Our brokerage operations have exposure to liquidity risk.Our brokerage operations have exposure to liquidity risk. Maintaining adequate liquidity is crucial to our brokerage operations, including keyfunctions such as transaction settlement and margin lending. We are subject to liquidity and capital adequacy requirements in various jurisdictions.Our liquidity needs are primarily met by equity contribution and revenue generation. A reduction of funds available from these sources may requireus to seek other potentially more expensive forms of financing, such as potential borrowings on revolving credit facilities. Our liquidity could beconstrained if we are unable to obtain financing on acceptable terms, or at all, due to a variety of unforeseen market disruptions. Inability to meetour funding needs in a timely manner would have a material adverse effect on our business. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 26 of 194 Table of Contents25Fluctuations in the value of Renminbi could result in foreign currency exchange losses.A substantial portion of our operating costs and expenses is denominated in Renminbi, while most of our revenues are denominated in U.S. dollars.Consequently, fluctuations in exchange rates, primarily those involving U.S. dollar, may affect the relative purchasing power of these proceeds andour balance sheet and earnings per share in U.S. dollars. In addition, appreciation or depreciation in the value of Renminbi relative to U.S. dollarwould affect our financial results reported in U.S. dollar terms without giving effect to any underlying change in our business, financial conditionor results of operations. Renminbi may appreciate or depreciate significantly in value against U.S. dollar in the long term, depending on thefluctuation of the basket of currencies against which it is currently valued, or it may be permitted to enter into a full float, which may also result ina significant appreciation or depreciation of Renminbi against U.S. dollar.The hedging options available in China to reduce our exposure to exchange rate fluctuations are quite limited. To date, we have not entered intoany hedging transactions in an effort to reduce our exposure to foreign currency exchange risk. While we may decide to enter into hedgingtransactions in the future, the availability and effectiveness of these hedges may be limited and we may not be able to hedge our exposureadequately or at all. In addition, our currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability toconvert Renminbi into foreign currency.We are exposed to credit risk with customers.A portion of our revenues arises from or is related to margin financing provided to our customers. By permitting customers to purchase securitieson margin, we are subject to risks inherent in extending credit, especially during periods of heightened market volatility. Substantial fluctuations inmarket values of securities and the failure to honor their commitments by our customers on margin financing and securities borrowing and lendingtransactions could have a material adverse effect on our revenues and profitability.We may be subject to litigation risk which could adversely affect our reputation, business, financial condition and results of operations.We are subject to arbitration claims and lawsuits in the ordinary course of our business. For example, as of the date of this report, two parallel purported class action lawsuits were filed in the New York Supreme Court, County of New York, Commercial Division (the “New York State Litigation”) in October 2019 and the United States District Court for the Southern District of New York (the “SDNY Litigation”) filed against the Company and its certain directors and underwriters in connection with the Company’s Initial Public Offering. With respect to the SDNY Litigation, the court granted our motion to dismiss in its entirety on March 17, 2021, finding that the plaintiffs failed to state a claim under the Securities Act of 1933 and dismissing the complaint with prejudice. With respect to the New York State Litigation, the court similarly granted our motion to dismiss in its entirety and dismissed the complaint on April 16, 2021. We continue to believe that these lawsuits are meritless. Actions brought against us may result in settlements, awards, injunctions, fines, penalties and other results adverse to us. Predicting the outcome of such matters is inherently difficult, particularly where claims are brought on behalf of various classes of claimants or by a large number of claimants, when claimants seek substantial or unspecified damages or when investigations or legal proceedings are at an early stage. A substantial judgment, settlement, fine or penalty could be material to our operating results or cash flows for a particular period, depending on our results for that period, or could cause us significant reputational harm, which could harm our business prospects. In market downturns, the volume of legal claims and amount of damages sought in litigation and regulatory proceedings against securities brokerage companies have historically increased. We are also subject to litigation claims from third parties alleging infringement of their intellectual property rights. Also see Item 3.D “Risk Factors — Risks Related to Our Business and Industry—We may be subject to intellectual property claims from others and applicable administrative penalties.” Such litigation can require the expenditure of significant resources, regardless of whether the claims have merit. If we were found to have infringed a third-party patent or other intellectual property right, then we could incur substantial liability and in some circumstances could be enjoined from using the relevant technology or providing related products and services, which could have a material adverse effect on our business and results of operations. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 27 of 194 Table of Contents26Our operations require our employees to frequently interact with our existing and potential customers. Although we have prudent internalprocedures and policies in place and we monitor employees’ interaction with existing and potential customers through our customer relationsmanagement system, or our CRM system, it is difficult to detect and deter misconducts and inappropriate behaviors of all of our employees and theprecautions we take to prevent and detect such behaviors may not be effective in all cases. Our employees could misappropriate customerinformation, conduct improper activities on behalf of our customers, make false or misleading statements, falsely promise investment returns toattract customers to trade, mis-record or otherwise try to hide improper activities from us.Misconduct by our employees or former employees could give rise to customer claims against us, including claims for negligence, fraud, failures tosupervise, breaches of fiduciary duty, transactions and intentional misconduct. These customer claims, regardless of their merits, could subject us tosubstantial losses and seriously harm our reputation. In addition, such customer claims may escalate into litigations or arbitrations. The outcome ofany arbitration or litigation is inherently uncertain, and defending against these claims could be both costly and time-consuming, and couldsignificantly divert the efforts and resources of our management and other personnel. A judgment against us in any such litigation could incurfinancial and reputation damage on our business. Even if we prevail in such litigation or arbitration, we could incur significant legal expenses.Our insurance coverage may be inadequate to cover risks related to our business and operation.While we maintain certain insurance for Tiger Brokers (NZ) Limited in New Zealand and UP Fintech Holding Limited in Cayman Islands such asprofessional liability insurance, directors’ and officers’ insurance, we do not maintain any other insurance policies for any other entities, and forTiger Brokers (NZ) Limited, there is no assurance that our insurance coverage will be adequate to cover potential losses. In addition, customers ofour consolidated accounts are not protected under the scheme of the Securities Investor Protection Corporation, or the SIPC, and we have neitherpurchased any commercial insurance to cover similar risks. Under the applicable laws and regulations in the relevant jurisdictions such as NewZealand, the United States, Singapore and China, we are not required to, and we do not, maintain any insurance in relation to our businessoperations, such as data security insurance, business interruption insurance, or liability insurance against liabilities arising from customercomplaints and litigation or other aspects of our business. Our current insurance policies may not protect us against such losses and liabilities.Although we believe that our insurance coverage is in line with industry practice in the relevant jurisdictions such as New Zealand, the UnitedStates, Singapore and China, if any of the incidents mentioned above occur and we have insufficient insurance to cover the liabilities associatedwith such incidents, it could have a material adverse effect on our financial condition, results of operations and business prospects.Some of our customers reach us on social media platforms, leading to our difficulties in maintaining all required communication records.Under the relevant laws and regulations, we are required to keep the records of our communications with customers concerning orders orcomplaints, e.g., under the NZX Participant Rules in New Zealand. To ensure all of our users and customers are best served, we occasionallyprovide customer service on popular social media platforms in a similar way as other market players in both our industry and other variousindustries. However, we cannot solve all the difficulties arising therefrom because the social media platforms usually do not have functions thattelephone or email operation systems use for keeping the communication records long term. Non-compliance with these requirements could have amaterial adverse effect on our business, financial condition and results of operations. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 28 of 194 Table of Contents27New lines of business or new services may subject us to additional risks.From time to time, we may implement new lines of business or offer new services within existing lines of business. For example, we commencedfutures trading in March 2016 and our IPO underwriting business experienced significant growth in 2020, and we have expanded our businessesinto other areas. There are substantial risks and uncertainties associated with these efforts, particularly in instances where the markets are not fullydeveloped. In developing and marketing new lines of business and/or new services, we may invest significant time and resources. Initial timetablesfor the introduction and development of new lines of business and/or new services may not be achieved and profitability targets may not provefeasible. External factors, such as compliance with regulations, competition and shifting market preferences, may also impact the successfulimplementation of a new line of business or a new service. Our personnel and technology systems may fail to adapt to the changes in such newareas or we may fail to effectively integrate new services into our existing operation and we may lack experience in managing new lines ofbusiness or new services. In addition, we may be unable to proceed our operation as planned or compete effectively due to different competitivelandscapes in these new areas. Even if we expand our businesses into new jurisdictions or areas, the expansion may not yield intended profitableresults. Any new line of business and/or new service could have a significant impact on the effectiveness of our internal control system.Furthermore, expansion of our existing lines of business and entry into new lines of business may expose us to additional litigation risk, includingthe risk of class-action litigation. Failure to successfully manage these risks in the development and implementation of new lines of business or newservices could have a material adverse effect on our business, results of operations and financial condition.We are in the process of expanding our international operations, which exposes us to significant risks.Our growth strategy includes expanding our international services and customer base. Expansion into new markets will require significantmanagement attention and financial resources worldwide. Additionally, we will be exposed to additional regulatory, operational, market, litigation,and publicity risks. In addition to those risks described under the heading “Any future change in the regulatory and legal regime for the securitiesbrokerage industry may have a significant impact on our business model,” we will be exposed to additional risks as a result of doing businessinternationally, including:●the difficulty of managing and staffing international operations and the increased operations, travel, infrastructure and legal compliancecosts associated with numerous international locations;●challenges to our corporate culture resulting from a dispersed workforce;●new and different sources of competition;●difficulties in complying with a wider array of regulatory requirements, including without limitation regulations relating to currency andcapital, transfers of funds, taxation, privacy and protection of customer data, broker-dealer requirements, and intellectual property;●compliance with various anti-bribery and anti-corruption laws such as the Foreign Corrupt Practices Act of 1977, or FCPA;●adverse tax consequences;●fluctuations in currency exchange rates; and●political or social developments, including unrest or economic instability, in a specific country or region in which we operate, whichcould have an adverse impact on our operations in that location.Our failure to manage any of these risks successfully could harm our planned international expansion and adversely affect our business, operatingresults and financial condition. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 29 of 194 Table of Contents28We may not be able to develop our margin financing and securities lending business as expected and may be exposed to credit risks related tothese businesses. In addition, we need adequate funding at reasonable costs to successfully operate our margin financing business, and accessto adequate funding at reasonable costs cannot be assured.Our margin financing and securities lending businesses may not develop as expected if clients fail to perform contractual obligations or the value ofcollateral held to secure the obligations is inadequate. We have adopted comprehensive internal policies and procedures designed to manage suchrisks. For example, once the margin value falls below the outstanding amount of the relevant loan extended as a result of a market downturn oradverse movement in the prices of the pledged securities, we will make a margin call requesting the client to deposit additional funds, sell securitiesor pledge additional securities to top up their margin value. If the client’s margin value still falls below the required standard, we will initiate ourliquidation protection mechanism on a real-time basis to bring the client’s account into margin compliance. Nevertheless, we cannot assure you thatwe will not be exposed to any credit risks associated with our margin financing and securities lending businesses, and we may experience disputeswith our clients after we make the margin calls. In particular, we may not always be able to fully recover the margin value through margin calls andour exposure to credit loss may be exacerbated during periods of high market volatility.Moreover, the growth and success of our margin financing business depend on the availability of adequate funding to meet our client demand forloans through our platform. We provided margin financing service for securities listed on the Hong Kong Stock Exchange, Singapore Exchangeand the major stock exchanges in the U.S., and we provided securities lending services for securities listed on the Hong Kong Stock Exchange andthe major stock exchanges in the U.S. We derive the funding for our margin financing business from a variety of sources, including funding securedfrom commercial banks, other licensed financial institutions and other parties as well as financing generated from our business operations. To theextent there is insufficient funding from institutional funding partners who are willing to accept the credit risk related to the collateral from ourclients, the funds available for our margin financing business might be limited and our ability to provide margin financing services to our clients toaddress their demand for loans would be adversely impacted. In addition, as we strive to offer our clients competitively priced services and theonline brokerage market is intensely competitive, we may attempt to further reduce our interest expenses from our funding partners. If we cannotcontinue to maintain our relationship with these funding partners and obtain adequate funding at reasonable costs, we may not be able to continueto offer or grow our margin financing business. To the extent that our funding partners find the risk-adjusted returns with us less attractive, we maynot be able to obtain the requisite level of funding at reasonable costs, or at all. If we are unable to provide our clients with margin loans or fund theloans on a timely basis due to insufficient funding or less favorable pricing compared to those of our competitors, it would harm our business,financial condition and results of operations.The wealth management products that we offer involve various risks and failure to identify or fully appreciate such risks may negatively affectour reputation, client relationships, results of operations and financial conditions. In addition, we rely on a limited number of wealthmanagement product providers.We offer our clients access to money market, fixed income, equity, balanced, private funds as well as bonds, catering to different investment targetsand risk preferences of our clients. These products often have complex structures and involve various risks, including default risks, interest risks,liquidity risks, market risks, counterparty risks, fraud risks and other risks. In addition, we are subject to regulations in relation to wealthmanagement products offering in different jurisdictions, and there is no assurance that our operation will be deemed as in full compliance with suchregulations at all times.Our success in offering our wealth management products and services depends, in part, on our ability to successfully identify the risks associatedwith such products and services, and failure to identify or fully appreciate such risks may negatively affect our reputation, client relationships,results of operations and financial conditions. Although we do not guarantee the principal or the return of the wealth management productsavailable through our platform and do not bear any liabilities for any loss to capital invested in the products, we must be cautious of the selection ofthe financial products we offer and must accurately describe the risks associated with those products for our clients. Although we enforce andimplement strict risk management policies and procedures, such risk management policies and procedures may not be fully effective in mitigatingthe risk exposure for all of our clients in all market environments or covering all types of risks. If we fail to identify and fully appreciate the risksassociated with the financial products we offer, or fail to disclose such risks to our clients, or if our clients suffer financial losses or other damagesresulting from the financial products we offer, our reputation, client relationships, results of operations and financial conditions will be materiallyand adversely affected. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 30 of 194 Table of Contents29We rely on a limited number of third parties who provide us with wealth management products, and our relationships with these product providersare integral to the smooth operation of our wealth management business. If our relationships with third-party service providers deteriorate or third-party service providers decide to terminate our respective business relationships for any reasons, such as to work with our competitors on moreexclusive or favorable terms or if they themselves become our competitors, our operation may be disrupted.Our operations may be subject to transfer pricing adjustments by competent authorities.We use transfer pricing arrangements to account for business activities among our subsidiaries in different jurisdictions. There is no assurance thatthe tax authorities in any of the jurisdictions where we operate would not subsequently challenge the appropriateness of our transfer pricingarrangements or that the relevant regulations or standards governing such arrangements will not be subject to future changes. If a competent taxauthority later finds that the transfer prices and the terms that we have applied are not appropriate, such authority may require us or our subsidiariesto re-assess the transfer prices and re-allocate the income or adjust the taxable income. Any such reallocation or adjustment could result in a higheroverall tax liability for us and may adversely affect our business, financial condition and results of operations.We may be unable to effectively manage our rapid growth.The rapid growth of our business during our limited operation history has placed significant demands on our management and other resources. Aswe grow, we may also need to enhance the reliability and scalability of our proprietary technology, network infrastructure and other aspects of ourIT systems. We may need to hire additional professionals in such areas as sales and marketing, customer support and risk management as well asother personnel to serve the enlarged customer base. Implementation of new business arrangements, expansion of technology infrastructure andincrease in the number of employees may further increase our operational complexity and impose higher standards on every aspect of ouroperations. Our management team may fail to effectively cope with the increased operational complexity, and we may fail to integrate newresources into our existing operation system. Therefore, we may not be able to maintain current growth rate or manage our growth effectively.We face risks related to natural disasters, health epidemics, terrorist attacks and other outbreaks, which could significantly disrupt ouroperations.The occurrence, especially in the regions and cities where we have business, of unforeseen or catastrophic events, including the emergence of apandemic such as COVID-19 or other widespread health emergency, terrorist attacks or natural disasters, could create economic and financialdisruptions, lead to operational difficulties that could impair our ability to manage our businesses, and expose our business activities to significantlosses. Our management team are principally located in Beijing, PRC and Auckland, New Zealand, U.S. and Singapore. A significant portion ofour technology research and development and services, supporting and other teams are based in Beijing, China. Most of our data centers are locatedin Hong Kong and Beijing, China. Although we have recovery and business continuity plans for our data centers, we cannot guarantee that theseplans would be adequate to mitigate the adverse effects to our sustainable operations caused by such unforeseen or catastrophic events. In addition,the major stock exchanges our operations rely on are in the U.S. and Hong Kong. Our operations could also be severely disrupted if the exchangeswe operate on were affected by natural disasters, health epidemics or man-caused disasters. An unforeseen or catastrophic event in any of theregions mentioned above could adversely impact our operations. Some measures caused by COVID-19 such as working remotely, travelrestrictions and extra health precaution etc. did affect the efficiency of work and several ongoing internal projects in 2020 and 2021; however, ourdaily operations were not affected as we operated on line and we also increased our resources to mitigate the impact.Negative media coverage related to, and our relationships with, our service providers and/or former shareholders could adversely affect ourbusiness.We may be affected by publicity relating to our service providers and/or shareholders. For example, in September 2018, there was negativepublicity involving certain senior officers of iResearch, the industry consultant we commissioned to prepare an industry report in connection withour initial public offering. According to a public announcement made by iResearch, certain senior officers of iResearch are cooperating withgovernmental investigations in China. Although we were informed by iResearch that its department involved in such negative media coverage didnot provide data for the preparation of the iResearch Report, such publicity may raise questions as to the integrity of the industry data or opinionsproduced by iResearch, including the data in the iResearch Report produced in connection with our initial public offering, or otherwise have anegative impact on our reputation. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 31 of 194 Table of Contents30Risks Related to Our Corporate StructurePRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using proceeds wereceived from our initial public offering and the Concurrent Private Placement to make loans or additional capital contributions to our PRCsubsidiaries.In 2015, the SAFE published the Circular of the State Administration of Foreign Exchange on Reforming the Management Approach regarding theSettlement of Foreign Exchange Capital of Foreign-invested Enterprises, or the SAFE Circular 19, which has come into effect since June 1, 2015.According to the SAFE Circular 19, foreign-invested enterprises are allowed to convert their registered capital from foreign exchange to Renminbiand apply such funds to equity investment within the PRC, conditioned upon the investment target’s duly registration with local bank of suchreinvestment and open a corresponding special account pending for foreign exchange settlement payment. Further, such conversion will be handledat the bank level and does not need to be approved by the SAFE. The SAFE Circular 19 prohibits foreign-invested enterprises from, among otherthings, using an RMB fund converted from its foreign exchange capital for expenditure beyond its business scope, investment in securities,providing entrusted loans, repaying loans between nonfinancial enterprises or purchasing real estate not for self-use. The SAFE promulgatedthe Circular on Reforming and Standardizing the Foreign Exchange Settlement Management Policy of Capital Account, or the SAFE Circular 16,effective on June 9, 2016, which reiterates some of the rules set forth in the SAFE Circular 19, but changes the prohibition against using RMBcapital converted from foreign currency-denominated registered capital of a foreign-invested enterprise to issue RMB entrusted loans, to theprohibition against using such capital to issue loans to non-associated enterprises.If we fail to comply with such regulations, our ability to capitalize the relevant PRC subsidiaries or fund our operations may be negatively affected,which could materially and adversely affect the liquidity of our relevant PRC subsidiaries or our business, financial condition, results of operationsand growth prospects.We may be subject to penalties, including restrictions on our ability to inject capital into our PRC subsidiaries, if our PRC residentshareholders or beneficial owners fail to comply with relevant PRC foreign exchange regulations.On July 4, 2014, the SAFE issued the Circular on Several Issues Concerning Foreign Exchange Administration of Domestic Residents Engaging inOverseas Investment, Financing and Round-Trip Investment via Special Purpose Vehicles, or the SAFE Circular 37, which replaced theprevious Notice on Relevant Issues Concerning Foreign Exchange Administration for Domestic Residents’ Financing and Roundtrip InvestmentThrough Offshore Special Purpose Vehicles, effective on November 1, 2005, or the SAFE Circular 75. The SAFE Circular 37 requires PRCindividuals, institutions and foreign individuals who have a habitual residence in the PRC due to economic interests, or collectively referred as thePRC residents, to register with the SAFE or its local branches in connection with their direct establishment or indirect control of an offshore entity,for the purpose of overseas investment and financing, with such PRC residents’ legally owned assets or equity interests in domestic enterprises oroffshore assets or interests. Such offshore entity is referred to as an offshore special purpose vehicle. In addition, such PRC residents must updatetheir foreign exchange registrations with the SAFE when the offshore special purpose vehicle undergoes material events relating to any change ofbasic information (including change of such PRC residents, name and operation term), increases or decreases in investment amount, share transfersor exchanges, or mergers or divisions. According to the Circular on Further Simplifying and Improving the Administration of Foreign ExchangeConcerning Direct Investment released on February 13, 2015 by the SAFE, local banks will examine and handle foreign exchange registration foroverseas direct investment, including the initial foreign exchange registration and amendment registration, under the SAFE Circular 37 fromJune 1, 2015.If any shareholder holding interest in an offshore special purpose vehicle, who is a PRC resident as determined by the SAFE Circular 37, fails tofulfill the required foreign exchange registration with the local SAFE branches or its designated banks, the offshore special purpose vehicle may berestricted in its ability to contribute additional capital to its PRC subsidiaries. Moreover, failure to comply with the SAFE registration describedabove could result in liability under PRC laws for evasion of applicable foreign exchange restrictions. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 32 of 194 Table of Contents31Mr. Tianhua Wu and some other individual shareholders, who indirectly hold shares in our Company and who are known to us as being PRCresidents have completed the SAFE registration pursuant to the SAFE Circular 37. We have requested all of our current shareholders and/orbeneficial owners to disclose whether they or their shareholders or beneficial owners fall within the ambit of the SAFE Circular 37 and urgedrelevant shareholders, upon learning that they are PRC residents, to register with the local SAFE branch or its designated bank as required underthe SAFE Circular 37. However, we may not be fully informed of the identities of all our shareholders or beneficial owners who are PRC residents,and we cannot provide any assurance that all of our shareholders and beneficial owners who are PRC residents will comply with our requests tomake, obtain or update any applicable registrations or comply with other requirements pursuant to the SAFE Circular 37 or other related rules in atimely manner. Failure of our existing and future shareholders who are PRC residents to register or amend their foreign exchange registrations in atimely manner pursuant to the SAFE Circular 37 and subsequent implementation rules may subject such beneficial owners or our wholly-ownedPRC subsidiary to fines and legal sanctions. Failure to register or comply with the relevant requirements may also limit our ability to contributeadditional capital to our WFOEs for the research and development and other supporting functions. These risks may have a material adverse effecton our business and results of operations.If the agreements that establish the structure for operating some of our activities in China do not comply with PRC regulations, or if theseregulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.Our WFOEs have entered into a series of contractual arrangements with our VIEs and their respective shareholders, respectively, which enable usto (i) exercise effective control over our VIEs, and (ii) receive substantially all of the economic benefits of our VIEs. As a result of thesecontractual arrangements, we have control over and are the primary beneficiary of our VIEs and hence consolidate their financial results into ourconsolidated financial statements under U.S. GAAP. See Item 4 “Information on the Company” for further details.While we believe that (i) the ownership structures of our VIEs in China and our WFOEs, comply with all existing PRC laws and regulations; and(ii) the contractual arrangements between our WFOEs, our VIEs and their respective shareholders governed by PRC law are valid, binding andenforceable, and in compliance with PRC laws or regulations currently in effect, there are substantial uncertainties regarding the interpretation andapplication of the existing and future PRC laws, regulations and rules. Accordingly, the PRC regulatory authorities may take a view that is notconsistent with the opinion of the Company and our PRC legal counsel. It is uncertain whether any new PRC laws or regulations relating tovariable interest entity structures will be adopted or if adopted, what they would provide. If we or any of our VIEs are found to be in violation ofany existing or future PRC laws or regulations, or fail to obtain or maintain any of the required permits or approvals, the relevant PRC regulatoryauthorities would have broad discretion to take action in dealing with such violations or failures, including:●revoking the business licenses and/or any permits held by such entities;●discontinuing or placing restrictions or onerous conditions on our activities through any transactions between our WFOEs and our VIEs;●imposing fines, confiscating the income from our WFOEs or our VIEs, or imposing other requirements with which we or our VIEs maynot be able to comply;●requiring us to restructure our ownership structure or activities, including terminating the contractual arrangements with our VIEs andderegistering the equity pledges of our VIEs, which in turn would affect our ability to consolidate, derive economic benefits from, or exerteffective control over our VIEs; or●restricting or prohibiting our use of the proceeds of our initial public offering and concurrent private placement to finance our businessand activities in China. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 33 of 194 Table of Contents32The imposition of any of these penalties would result in a material and adverse effect on our ability to conduct our business. In addition, it isunclear what impact the PRC government actions would have on us and on our ability to consolidate the financial results of our VIEs in ourconsolidated financial statements, if the PRC government authorities were to find our legal structure and contractual arrangements to be in violationof PRC laws and regulations. If the imposition of any of these government actions causes us to lose our right to direct the activities of our VIEs andwe are not able to restructure our ownership structure and operations in a satisfactory manner, or any other significant penalties imposed on us inthis event, there would have a material adverse effect on our activities in China, and our ability to conduct our business may be negatively affected.Uncertainties exist with respect to the interpretation and implementation of the newly enacted Foreign Investment Law of the PRC and how itmay impact the viability of our current corporate structure, corporate governance and business operations.On March 15, 2019, the National People’s Congress adopted the Foreign Investment Law of the PRC, or the FIL, which became effective onJanuary 1, 2020 and replaced the Wholly Foreign-Invested Enterprise Law of the PRC, the Sino-Foreign Cooperative Joint Venture Enterprise Lawof the PRC and the Sino-Foreign Equity Joint Venture Enterprise Law of the PRC, together with their implementation rules and ancillaryregulations. On December 26, 2019, the State Council published the Implementation Rules of the Foreign Investment Law, or the FILImplementation Rules, which took effect on January 1, 2020.The FIL embodies an expected PRC regulatory trend to rationalize its foreign investment regulatory regime in line with prevailing internationalpractice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic investments. However, since it isrelatively new, uncertainties still exist in relation to its interpretation and implementation. For example, the FIL removes all references to the termsof “de facto control” or “contractual control” as defined in the draft published in 2015 by the Ministry of Commerce, or the MOFCOM, and adds acatch-all clause to the definition of “foreign investment” so that foreign investment, by its definition, includes “investments made by foreigninvestors in China through other means defined by other laws or administrative regulations or provisions promulgated by the State Council”without further elaboration on the meaning of “other means.” The FIL Implementation Rules also remain silent on contractual arrangements. Itleaves leeway for the future legislations promulgated by the State Council to provide for contractual arrangements as a form of foreign investment.It is therefore uncertain whether our corporate structure will be seen as violating the foreign investment rules as we are currently leverage thecontractual arrangement to operate certain businesses in which foreign investors are prohibited from or restricted to investing.In addition, the FIL grants national treatment to foreign invested entities, except for those foreign invested entities that operate in industries deemedto be either “restricted” or “prohibited” in the “negative list”. The current Special Administrative Measures for Market Access of ForeignInvestment (Negative List) (2020 Edition) was issued by the National Development and Reform Commission, or the NDRC, and the MOFCOM onJune 23, 2020 and became effective on July 23, 2020. Furthermore, on December 19, 2020, the NDRC and the MOFCOM jointly issued theMeasures for Security Review of Foreign Investment, effective on January 18, 2021, which provides detailed guidance regarding security review offoreign investment that has a potential impact on national security. However, there remain a number of unclear issues under the Measures,including but not limited to its view towards contractual arrangements. As the Measures was only recently issued, there are very fewinterpretations, implementation guidance or precedents to follow in practice. If future legislations prescribed by the State Council mandate furtheractions to be taken by companies with respect to existing contractual arrangement, we may face substantial uncertainties as to whether we cancomplete such actions in a timely manner, or at all. Failure to take timely and appropriate measures to comply with any of these or similarregulatory compliance requirements could materially and adversely affect our current corporate structure, corporate governance and businessoperations.We rely on contractual arrangements with our VIEs and their respective shareholders for a large portion of our business operations, whichmay not be as effective as direct ownership in providing operational control.We have relied and expect to continue to rely on contractual arrangements with our VIEs and their respective shareholders to conduct certain of ourkey supporting functions. These contractual arrangements may not be as effective as direct ownership in providing us with control over our VIEs.For example, our VIEs and their respective shareholders could breach their contractual arrangements with us by, among other things, failing toconduct their operations in an acceptable manner or taking other actions that are detrimental to our interests. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 34 of 194 Table of Contents33If we had direct ownership of our VIEs, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of ourVIEs, which in turn could implement changes, subject to any applicable fiduciary obligations, at the management and operational level. However,under the current contractual arrangements, we rely on the performance by our VIEs and their respective shareholders of their obligations under thecontracts to exercise control over our VIEs. Although our directors and shareholders together ultimately controls our VIEs, the shareholders of ourconsolidated VIEs may not act in the best interests of our company or may not perform their obligations under these contracts. Such risks existthroughout the period in which we intend to operate certain portions of our business through the contractual arrangements with our VIEs. If anydisputes relating to these contracts remain unresolved, we will have to enforce our rights under these contracts through the operations of PRC lawand arbitration, litigation and other legal proceedings and therefore will be subject to uncertainties in the PRC legal system. See “—Any failure byour VIEs or their shareholders to perform their obligations under our contractual arrangements with them would have a material and adverse effecton our business.” Therefore, our contractual arrangements with our VIEs may not be as effective in ensuring our control over the relevant portionof our business operations as direct ownership would be.Any failure by our VIEs or their shareholders to perform their obligations under our contractual arrangements with them would have amaterial and adverse effect on our business.We refer to the shareholders of each of our VIEs as its nominee shareholders because although they remain the holders of equity interests on recordin each of our VIEs, pursuant to the terms of the relevant power of attorney, each such shareholder has irrevocably authorized the relevant WFOEto exercise his, her or its rights as a shareholder of the relevant VIE. However, if our VIEs or their shareholders fail to perform their respectiveobligations under the contractual arrangements, we may have to incur substantial costs and expend additional resources to enforce sucharrangements. We may also have to rely on legal remedies under the PRC law, including seeking specific performance or injunctive relief, andclaiming damages, which we cannot assure will be effective under the PRC law. For example, if the shareholders of our VIEs refuse to transfertheir equity interests in our VIEs to us or our designee if we exercise the purchase option pursuant to these contractual arrangements, or if theyotherwise act in bad faith towards us, then we may have to take legal actions to compel them to perform their contractual obligations.All of the agreements under our contractual arrangements are governed by PRC law and provide for the resolution of disputes through arbitration inChina. Accordingly, these contracts would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRClegal procedures. The legal system in the PRC is not as developed as in some other jurisdictions, such as the U.S. As a result, uncertainties in thePRC legal system could limit our ability to enforce these contractual arrangements. See “—Risks Related to Doing Business in China—The legalsystem of the PRC is not fully developed and there are inherent uncertainties that may affect the protection afforded to us.” Meanwhile, there arevery few precedents and little formal guidance as to how contractual arrangements in the context of a VIE should be interpreted or enforced underthe PRC law. There remain significant uncertainties regarding the ultimate outcome of such arbitration. In addition, under the PRC law, rulings byarbitrators are final, parties cannot appeal the arbitration results in courts, and if the losing parties fail to carry out the arbitration awards within aprescribed time limit, the prevailing parties may only enforce the arbitration awards in PRC courts through arbitration award recognition andenforcement proceedings, which would require additional expenses and delay. In the event we are unable to enforce these contractualarrangements, or if we suffer significant delays or other obstacles in the process of enforcing these contractual arrangements, we may not be able toexert effective control over our VIEs, and our ability to conduct our business may be negatively affected.The shareholders of our VIEs may have potential conflicts of interest with us, which may materially and adversely affect our business.The shareholders of our VIEs may have potential conflicts of interest with us. These shareholders may breach, or cause our VIEs to breach, orrefuse to renew, the existing contractual arrangements we have with them and our VIEs, which would have a material and adverse effect on ourability to effectively control our VIEs and receive economic benefits from them. For example, the shareholders may be able to cause ouragreements with our VIEs to be performed in a manner adverse to us by, among other things, failing to remit payments due under the contractualarrangements to us in a timely manner. We cannot assure you that when conflicts of interest arise any or all of these shareholders will act in the bestinterests of our company or such conflicts will be resolved in our favor. Currently, we do not have any arrangements to address potential conflictsof interest between these shareholders and our company. If we cannot resolve any conflict of interest or dispute between us and these shareholders,we would have to rely on legal proceedings, which could result in disruption of our business and subject us to substantial uncertainties as to theoutcome of any such legal proceedings. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 35 of 194 Table of Contents34Contractual arrangements in relation to our VIEs may be subject to scrutiny by the PRC tax authorities and they may determine that we or ourPRC VIEs owe additional taxes, which could negatively affect our financial condition and the value of your investment.Under applicable PRC laws and regulations, arrangements and transactions among related parties may be subject to audit or challenge by the PRCtax authorities. We could face material and adverse tax consequences if the PRC tax authorities determine that the VIE contractual arrangementswere not entered into on an arm’s length basis in such a way as to result in an impermissible reduction in taxes under applicable PRC laws,rules and regulations, and adjust the income of our VIEs in the form of a transfer pricing adjustment. A transfer pricing adjustment could, amongother things, result in a reduction of expense deductions recorded by our VIEs for PRC tax purposes, which could in turn increase their liabilitieswithout reducing our WFOEs’ tax expenses. In addition, the PRC tax authorities may impose late payment fees and other penalties on our VIEs forthe adjusted but unpaid taxes according to the applicable regulations. Our financial position could be materially and adversely affected if our VIEs’tax liabilities increase or if it is required to pay late payment fees and other penalties.We may lose the ability to use and enjoy assets held by our VIEs that are material to the operation of certain portions of our business if ourVIEs go bankrupt or become subject to a dissolution or liquidation proceeding.As part of our contractual arrangements with our VIEs, our VIEs and their subsidiaries hold certain assets that are material to the operation ofcertain portion of our business, including intellectual properties. If our VIEs go bankrupt and all or part of its assets become subject to liens orrights of third-party creditors, we may be unable to continue some or all of our business activities, which could materially and adversely affect ourbusiness, financial condition and results of operations. Under the contractual arrangements, our VIEs may not, in any manner, sell, transfer,mortgage or dispose of their assets or legal or beneficial interests in the business without our prior consent. If our VIEs undergo a voluntary orinvoluntary liquidation proceeding, independent third-party creditors may claim rights to some or all of these assets, thereby hindering our abilityto operate our business, which could materially and adversely affect our business and results of operations.We may be subject to penalties for failure to fully comply with the NDRC and the MOFCOM filing requirements for historical overseasinvestments.Historically, before we established our offshore holding structure, our PRC operating entity, Beijing Rongke, had established Tiger TechnologyCorporation Limited, or Tiger Technology, in Hong Kong, which thereafter acquired our New Zealand registered companies, Tiger Brokers (NZ)Limited, and Tiger Holdings Group Limited, or Tiger Holdings. Under the applicable PRC laws and regulations, PRC entities need to obtainapprovals from or file with the National Development and Reform Commission, or the NDRC and the Ministry of Commerce, or the MOFCOM, ortheir local branches before conducting any overseas investments, and are also required to apply for additional approvals or file or make certainamendments if any change occurs to such overseas investments. Beijing Rongke has filed with the relevant branch of the MOFCOM for investingin Tiger Technology, but failed to update such filing for Tiger Technology’s further investments in Tiger Brokers (NZ) Limited and Tiger Holdings.It also failed to file with the NDRC for the overseas investment as required under then effective PRC laws. Failure to conduct such filingprocedures may subject us to an order of suspension of Beijing Rongke’s investment in Tiger Technology, and may result in the inability forBeijing Rongke to enjoy relevant policy favors for three years. As of the date of this report, we have not received any rectification requirements orpenalties from the NDRC or the MOFCOM. In addition, we have taken certain rectification measures. For instance, we have recently transferred allequity interest in Tiger Brokers (NZ) Limited from Tiger Technology to our Singapore subsidiary, Tiger Fintech (Singapore) Pte. Ltd. forcommercial needs, and we are in the process of returning the proceeds to Beijing Rongke and de-registering our filing with MOFCOM andliquidation of Tiger Technology as rectification measures. However, we cannot assure you that these rectifications will fully satisfy the relevantregulatory authorities’ requirements or we will not be subject to investigation or scrutiny from regulators even though we had not yet received anynegative opinion or penalty for our historical overseas investments so far. If the NDRC or the MOFCOM imposes any penalties on us or requires usto make any further rectifications, our business and results of operations may be materially and adversely affected. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 36 of 194 Table of Contents35Risks Related to Doing Business in ChinaThe current trade war between the U.S. and China, and on a larger scale internationally, may dampen growth in China and other marketswhere the majority of our customers reside, and our activities and results may be negatively impacted.In 2018, the U.S. government began imposing new or higher tariffs on specified products imported from China to penalize China for what itcharacterizes as unfair trade practices, and China responded by imposing new or higher tariffs on specified products imported from the U.S. Whilethe U.S. and China signed an agreement in January 2020 to ease some of these tariffs, others remain in place, and additional tariffs could beimposed by one or both countries in the future. Although we are not subject to any of those tariff measures, the tariffs may adversely affect theeconomic growth in China and other markets and the financial condition of our customers. With the potential decrease in the spending powers ofour target customers, we cannot guarantee that there will be no negative impact on our operations. In addition, the current and future actions orescalations by either the U.S. or China that affect trade relations may cause global economic turmoil and potentially have a negative impact on ourbusiness, financial condition and results of operations, and we cannot provide any assurance as to whether such actions will occur or the form thatthey may take.PRC economic, political and social conditions as well as government policies could adversely affect our business and prospects.We mainly conduct our brokerage operations in New Zealand and conduct technology research and development in China through our PRCsubsidiaries, our VIEs and their subsidiaries. Because technology development is our key backbone for our operations in a long run, our financialcondition and results of operations are subject to influences from PRC’s economic, political and social conditions to a great extent. The PRCeconomy differs from the economies of most developed countries in many aspects, including, but not limited to, the degree of governmentinvolvement, control level of corruption, control of capital investment, reinvestment control of foreign exchange, allocation of resources, growthrate and development level.For approximately three decades, the PRC government has implemented economic reform measures to utilize market forces in the development ofthe PRC economy. We cannot predict whether changes in the PRC’s economic, political and social conditions and in its laws, regulations andpolicies will have any adverse effect on our current or future business, financial condition or results of operations. In addition, many of theeconomic reforms carried out by the PRC government are unprecedented or experimental and are expected to be refined and improved over time.This refining and improving process may not necessarily have a positive effect on our operations and business development. For example, the PRCgovernment has in the past implemented a number of measures intended to slow down certain segments of the economy, including the propertyindustry, which the government believed to be overheating. These actions, as well as other actions and policies of the PRC government, couldcause a decrease in the overall level of economic activities in the PRC and, in turn, have an adverse impact on our business and financial condition.The legal system of the PRC is not fully developed and there are uncertainties that may affect the protection afforded to us.Our business and activities in China are governed by the PRC laws and regulations. The PRC legal system is generally based on written statutes.Prior court decisions may be cited for reference but have limited precedential value. Since 1979, PRC legislation and regulations have significantlyenhanced the protections afforded to various industries in China. However, as these laws and regulations are relatively new and continue to evolve,interpretation and enforcement of these laws and regulations involve significant uncertainties and different degrees of inconsistency. Some of thelaws and regulations are still in the developmental stage and are therefore subject to policy changes. Many laws, regulations, policies and legalrequirements have only been recently adopted by PRC central or local government agencies, and their implementation, interpretation andenforcement may involve uncertainty due to the lack of established practice available for reference. We cannot predict the effect of future legaldevelopments in China, including the promulgation of new laws, changes in existing laws or their interpretation or enforcement, or the preemptionof local regulations by national laws. As a result, there are substantial uncertainties as to the legal protection available to us. Furthermore, due tothe limited volume of published cases and the non-binding nature of prior court decisions, the outcome of the dispute resolution may not be asconsistent or predictable as in other more developed jurisdictions, which may limit the legal protection available to us. For example, the SecuritiesLaw most recently amended in December 2019 and effective on March 1, 2020, stipulated that the offering and trading of securities outside thePeople’s Republic of China which disrupt the domestic market order of the People’s Republic of China and harm the legitimate rights and interestsof domestic investors shall be dealt with pursuant to the relevant provisions of this Securities Law, and legal liability shall be pursued. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 37 of 194 Table of Contents36We may be adversely affected by the complexity, uncertainties and changes in the PRC regulations of Internet-related businesses andcompanies, and any lack of requisite licenses, permits or approvals applicable to our business may have a material adverse effect on ourbusiness and results of operations.The PRC government extensively regulates the Internet industry, including foreign ownership of, and the licensing and permit requirementspertaining to, companies in the internet industry. These Internet-related laws and regulations are relatively new and evolving, and theirinterpretation and enforcement involve significant uncertainties. As a result, in certain circumstances it may be difficult to determine what actionsor omissions may be deemed to be in violation of applicable laws and regulations.We only have contractual control over the entities that provide Internet information provision services in China. We do not directly own suchentities due to the restriction of foreign investment in businesses providing value-added telecommunication services in China, including Internetinformation provision services. This may significantly disrupt our business, subject us to sanctions, compromise enforceability of relatedcontractual arrangements, or have other harmful effects on us.The evolving PRC regulatory system for the Internet industry may lead to the establishment of new regulatory agencies. For example, in May 2011,the State Council announced the establishment of a new department, the Cyberspace Administration of China, or the CAC, with the involvement ofthe State Council Information Office, the Ministry of Industry and Information Technology, or the MIIT, and the Ministry of Public Security. Theprimary role of this new agency is to facilitate the policy-making and legislative development in this field, to direct and coordinate with therelevant departments in connection with online content administration and to deal with cross-ministry regulatory matters in relation to the Internetindustry.Considering our business arrangement and development plan, we have set up another set of VIE structures and intend the new VIE or itssubsidiaries to apply for or hold the value-added telecommunications business license(s) as soon as practical to conduct value-addedtelecommunications business such as Internet information services. See Item 4.B “Business Overview—Regulations—PRC Regulations Relating toInternet Companies—Regulations on Value-Added Telecommunication Services.” We cannot guarantee that our new VIE, Beijing Yiyi or itssubsidiary, will continue or maintain such value-added telecommunications business license due to uncertainties from PRC governmentalauthorities.Beijing Yiyi’s subsidiary, Beijing U-Tiger Network Technology Co., LTD, obtained the License for Production and Operation of Radio and TVPrograms on June 14, 2019. Beijing Yiyi’s subsidiary, Beijing Huyi Technology Co., LTD, obtained the License for Production and Operation ofRadio and TV Programs on December 9, 2019, the value-added telecommunications business license on September 4, 2019, and the Publicationbusiness license on November 4, 2019. Beijing Yiyi’s subsidiary, Beijing Zhi Jian Feng Yi Information Technology Co., LTD, obtained the Licensefor Production and Operation of Radio and TV Programs on April 22, 2019, the value-added telecommunications business license on April 23,2019, the Publication business license on August 13, 2019, and the Online Culture Operating Permit on May 31, 2019.In addition, our provision of certain services online may subject us to license requirements in China. For instance, we provide some recordedvideos as a way of customer education and occasionally launch other audio-video contents on our platform and our community, which may result inaudio-video license requirements from the Ministry of Culture and Tourism, or MCT, or its provincial level branches. We also provide some digitalworks on our website and APP, which may require online publishing service license issued by the National Radio and Television Administration, orthe NRTA, or its provincial level branches. In addition, we reprint some articles related to the stock market on our website and APP, and thereforemay be subject to permit and approval requirements from the State Council Information Office. Furthermore, we also need to strictly follow therequirements applicable to online content providers set forth by the relevant regulatory authorities, especially for financial information. See Item4.B “Business Overview—Regulations—PRC Regulations Relating to Internet Companies—PRC Regulation on Financial Information Services.”Failure to comply with these license or other requirements may subject us to penalties, which may adversely affect our business operations andreputation. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 38 of 194 Table of Contents37The interpretation and application of the existing PRC laws, regulations and policies and possible new laws, regulations or policies relating to theInternet industry have created substantial uncertainties regarding the legality of the existing and future foreign investments in, and the businessesand activities of, Internet businesses in China, including our business. We cannot assure you that we have obtained all the permits or licensesrelated to our Internet related business in China that might be required for conducting our supporting functions in China or will be able to maintainour existing licenses or obtain new ones. In the event that the PRC government considers that we were operating without the proper approvals,licenses or permits, promulgates new laws and regulations that require additional approvals or licenses, or imposes additional restrictions on theoperation of any part of our business, it has the power, among other things, to levy fines, confiscate our income, revoke our business licenses, andrequire us to discontinue our relevant business or impose restrictions on the affected portion of our business. Any of these actions by the PRCgovernment may have a material adverse effect on our business and results of operations.The enforcement of the Labor Contract Law of the People’s Republic of China, or the PRC Labor Contract Law, and other labor-relatedregulations in the PRC may increase our labor costs and impose limitations on our labor practices.On June 29, 2007, the Standing Committee of the National People’s Congress, or the SCNPC, in China enacted the PRC Labor Contract Law,which became effective on January 1, 2008 and was amended on December 28, 2012. The PRC Labor Contract Law introduces specific provisionsrelated to fixed-term employment contracts, part-time employment, probation, consultation with labor unions and employee assemblies,employment without a written contract, dismissal of employees, severance, and collective bargaining, which together represent enhancedenforcement of labor laws and regulations. According to the PRC Labor Contract Law, an employer is obliged to sign an unfixed-term laborcontract with any employee who has worked for the employer for 10 consecutive years. Further, if an employee requests or agrees to renew a fixed-term labor contract that has already been entered into twice consecutively, the resulting contract must have an unfixed term, subject to certainexceptions. The employer must pay economic compensation to an employee where a labor contract is terminated or expires in accordance with thePRC Labor Contract Law, except for certain situations which are specifically regulated. In addition, the government has issued various labor-related regulations to further protect the rights of employees. According to such laws and regulations, employees are entitled to an annual leaveranging from 5 to 15 days and are able to be compensated for any untaken annual leave days in the amount of three times of their daily salary,subject to certain exceptions.As a result of these regulations, which are designed to enhance labor protection, we expect our labor costs to increase, as the continued success ofour business depends significantly on our ability to attract and retain qualified personnel. In the event that we decide to change our employment orlabor practices, the PRC Labor Contract Law and its implementation rules may also limit our ability to affect those changes in a manner that webelieve to be cost-effective. In addition, as the interpretation and implementation of these new regulations are still evolving, our employmentpractices may not be at all times deemed in compliance with the new regulations. If we are subject to severe penalties or incur significant liabilitiesin connection with labor disputes or investigations, our business and financial condition may be adversely affected.In addition, on December 28, 2012, the PRC Labor Contract Law was amended to impose more stringent requirements on labor dispatches, andsuch amendments became effective on July 1, 2013. For example, the number of dispatched contract workers that an employer hires may notexceed a certain percentage of the total number of employees to be decided by the Ministry of Human Resources and Social Security, and thedispatched contract workers can only engage in temporary, auxiliary or substitute work. According to the Interim Provisions on Labor Dispatch, orthe Interim Provisions, promulgated by the Ministry of Human Resources and Social Security on January 24, 2014, which became effective onMarch 1, 2014, the number of dispatched contract workers hired by an employer shall not exceed 10% of the total number of its employees(including both directly hired employees and dispatched contract workers). The Interim Provisions further requires the employer that is not incompliance with the above provisions to formulate a plan to reduce the number of its dispatched contract workers to below 10% of the total numberof its employees prior to March 1, 2016. Such limitations on use of dispatched labor may increase our labor costs and impose limitations on ouremployment practices, which may adversely affect our business and profitability. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 39 of 194 Table of Contents38Failure to make adequate contributions to various employee benefit plans as required by the PRC regulations may subject us to penalties.Companies operating in China are required to participate in various government-sponsored employee benefit plans, including certain socialinsurances, housing funds and other welfare-oriented payment obligations, and contribute to the plans in amounts equal to certain percentages ofsalaries, including bonuses and allowances, of our employees up to a maximum amount specified by the local government from time to time atlocations where we operate our businesses. The requirement of employee benefit plans has not been implemented consistently by the localgovernments in China given the different levels of economic development in different locations. Our PRC operating entities incorporated in variouslocations in China have not made adequate employee benefit payments and we have recorded accruals for estimated underpaid amounts in ourfinancial statements. We may be required to make up the contributions for these plans as well as to pay late fees and fines.Regulators may impose penalties and fines with respect to shortfall in social insurance payment. A late payment fee at the rate of 0.05% per day ofthe outstanding amount from the due date may be imposed, and if such amounts remain outstanding beyond a prescribed time limit, a fine of one tothree times of the outstanding amount may be imposed. While there are no explicit quantitative statutory fines or penalties on late payments ofhousing funds according to Regulations on the Housing Provident Fund (Revised in 2019) as advised by our PRC legal counsel, the housingaccumulation fund management center may order us to pay any housing fund shortfalls immediately. Although based on the opinion of our PRCcounsel, the possibility that we will be subject to any fine or penalty is remote, if we become subject to such fines or penalties in relation to theunderpaid employee benefits, our financial condition and results of operations may be adversely affected.Any failure to comply with PRC regulations regarding the registration requirements for employee share incentive plans may subject the PRCplan participants or us to fines and other legal or administrative sanctions.Pursuant to the Notice on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Planof Overseas Publicly Listed Company, issued by the SAFE in February 2012, employees, directors, supervisors and other senior managementparticipating in any stock incentive plan of an overseas publicly listed company who are PRC citizens or who are non-PRC citizens residing inChina for a continuous period of not less than one year, subject to a few exceptions, are required to register with the SAFE through a domesticqualified agent, which could be a PRC subsidiary of such overseas listed company, and complete certain other procedures. We and our directors,executive officers and other employees who are PRC citizens or who reside in the PRC for a continuous period of not less than one year and whohave been granted restricted shares, restricted share units or options became subject to these regulations since our company became an overseaslisted company. Failure to complete the SAFE registrations may subject them to fines and legal sanctions and may also limit our ability tocontribute additional capital into our wholly foreign-owned subsidiaries in China. We also face regulatory uncertainties that could restrict ourability to adopt additional incentive plans for our directors and employees under PRC law.In addition, the State Administration of Taxation, or the SAT, has issued certain circulars concerning employee share options or restricted shares.Under these circulars, the employees working in the PRC who exercise share options or are granted restricted share units will be subject to PRCindividual income tax. The PRC subsidiaries of such an overseas listed company have obligations to file documents related to employee shareoptions or restricted shares with relevant tax authorities and to withhold individual income taxes of those employees who exercise their shareoptions. If the employees fail to pay or the PRC subsidiaries fail to withhold their income taxes in compliance with relevant laws and regulations,the PRC subsidiaries may face sanctions imposed by the tax authorities or other PRC government authorities. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 40 of 194 Table of Contents39We may be deemed to be a PRC resident enterprise under the Enterprise Income Tax Law, or the EIT Law, and be subject to the PRC taxationon our worldwide income, which may significantly increase our income tax expenses and materially decrease our profitability.Under the EIT Law that took effect on January 1, 2008, enterprises established outside of China whose “de facto management bodies” are locatedin China are considered to be “resident enterprises” and will generally be subject to a uniform 25% corporate income tax on their global income(excluding dividends received from “resident enterprises”). In addition, a circular issued by SAT on April 22, 2009 and amended on January 29,2014 sets out certain standards for determining whether the “de facto management body” of an offshore enterprise funded by Chinese enterprises ascontrolling shareholders is located in China. Although this circular applies only to offshore enterprises funded by Chinese enterprises as controllingshareholders, rather than those funded by Chinese or foreign individuals or foreign enterprises as controlling shareholders (such as our company),the determining criteria set forth in the circular may reflect SAT’s general position on how the “de facto management body” test should be appliedin determining the tax resident status of offshore enterprises, regardless of how they are funded. Although our company is not funded by Chineseenterprises as controlling shareholders, substantial uncertainties remain as to whether our company or any of our other non-PRC entities will bedeemed a PRC resident enterprise for the EIT purposes. If we or any of our subsidiaries registered outside the PRC are to be deemed a “residententerprise” under the EIT Law, our income tax expenses may increase significantly, and our profitability could decrease materially.You may be subject to PRC withholding tax on dividends from us and PRC income tax on any gain realized on the transfer of our shares orADSs if we are deemed a PRC resident enterprise.As described above, we may be treated as a PRC resident enterprise for PRC tax purposes. Under the EIT Law and its implementation rules, PRCwithholding tax at the rate of 10% is normally applicable to PRC sourced dividends payable to investors that are non-PRC resident enterprises,which do not have an establishment or place of business in PRC, or which have such establishment or place of business if the relevant income isnot effectively connected with the establishment or place of business. Any gain realized on the transfer of ADSs or shares by such non-PRCresident enterprise investors is also subject to a 10% PRC income tax if such gain is regarded as income derived from sources within the PRC.Under the PRC Individual Income Tax Law and its implementation rules, PRC sourced dividends paid to non-PRC individual investors aregenerally subject to a PRC withholding tax at a rate of 20% and gains from PRC sources realized by such investors on the transfer of ADSs orshares are generally subject to a 20% PRC income tax. While substantially all of our brokerage operations are in New Zealand, it is unclearwhether dividends we pay with respect to our ADSs, or the gain realized from the transfer of our ADSs, would be treated as the income derivedfrom sources within the PRC and as a result be subject to PRC income tax if we were considered a PRC resident enterprise, as described above. See“—We may be deemed to be a PRC resident enterprise under the Enterprise Income Tax Law, or the EIT Law, and be subject to the PRC taxationon our worldwide income, which may significantly increase our income tax expenses and materially decrease our profitability.” If PRC income taxwere imposed on gains realized through the transfer of our ADSs or on dividends paid to our non-resident investors, the value of your investment inour ADSs may be materially and adversely affected. Any PRC tax liability described above may be reduced under applicable tax treaties. However,it is unclear whether our ADS holders whose jurisdictions of residence have tax treaties or arrangements with China will be able to obtain thebenefits of such tax treaties or arrangements, if the prerequisites provided under the relevant treaties or arrangements were not satisfied. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 41 of 194 Table of Contents40We face uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies.On February 3, 2015, the SAT issued the Circular on issues of enterprise Income Tax on Indirect Transfer of Assets by Non-PRC ResidentEnterprise, or the SAT Circular 7 pursuant to which if a non-resident enterprise transfers the equity interests of a PRC resident enterprise indirectlyby transfer of the equity interests of an offshore holding company (other than prescribed exempted situations including the purchase and sale ofshares in public securities market) without a reasonable commercial purpose, the PRC tax authorities have the power to reassess the nature of thetransaction and the indirect equity transfer might be treated as a direct transfer. As a result, the gain derived from such transfer, that is attributableto the PRC taxable properties will be subject to the PRC withholding tax at a rate of 10%. Under the SAT Circular 7, the transfer which meets all ofthe following circumstances shall be deemed as having no reasonable commercial purpose: (i) over 75% of the value of the equity interests of theoffshore holding company are directly or indirectly derived from PRC taxable properties; (ii) at any time during the year before the indirecttransfer, over 90% of the total properties of the offshore holding company are directly or indirectly constituted by investments within PRC territory,or in the year before the indirect transfer, over 90% of the offshore holding company’s total income is directly or indirectly derived from withinPRC territory; (iii) the function performed and risks assumed by the offshore holding company and its subsidiaries that directly or indirectly holdPRC taxable properties are insufficient to substantiate its economic substance; or (iv) the foreign income tax imposed on the indirect transfer islower than the PRC tax that may be imposed in the event of a direct transfer of the PRC taxable properties.The SAT Circular 7 and its interpretation by relevant PRC authorities clarify that an exemption is available for transfers of shares in a publicly-traded entity that is listed overseas if the purchase of the shares and the sale of the shares both take place in the open market. However, if ashareholder of an entity that is listed overseas purchases shares in the open market and sells them in a private transaction, or purchases shares in aprivate transaction and sells them in the open market, the PRC tax authorities might deem such a transfer to be subject to the SAT Circular 7, whichcould subject such shareholder to additional reporting obligations or tax burdens. Accordingly, if a holder of our shares or ADSs purchases ourshares or ADSs in the open market and sells them in a private transaction, or purchases our shares or ADSs in a private transaction and sells themin the open market, and fails to comply with the SAT Circular 7, the PRC tax authorities may take actions, including requesting us to provideassistance for their investigation or impose a penalty on us, which could have a negative impact on our business operations. In addition, since wemay pursue acquisitions as one of our growth strategies, and may conduct acquisitions involving complex corporate structures, the PRC taxauthorities might impose taxes on capital gains or request that we submit certain additional documentation for their review in connection with anypotential acquisitions, which may incur additional acquisition costs, or delay our acquisition timetable.The PRC tax authorities have discretion under the SAT Circular 7 to make adjustments to the taxable capital gains based on the difference betweenthe fair value of the equity interests transferred and the cost of investment. We may pursue acquisitions in the future that involve complex corporatestructures. If we are considered a non-resident enterprise under the EIT Law and if the PRC tax authorities make adjustments to the taxable incomeof these transactions under the SAT Circular 7, our income tax expenses associated with such potential acquisitions will be increased, which mayhave an adverse effect on our financial condition and results of operations.We may not be able to obtain certain tax benefits for dividends paid by our PRC subsidiaries to us through our Hong Kong subsidiaries.Pursuant to the EIT Law and its implementation rules, if a non-resident enterprise has not set up an establishment in the PRC, or has set up anestablishment therein but its income has no actual connection with such establishment, it will be subject to a withholding tax on its PRC-sourcedincome at a rate of 10%. Pursuant to the Arrangement between the Mainland China and the Hong Kong Special Administrative Region for theAvoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, or the Double Taxation Arrangement, thewithholding tax rate on dividends paid by a PRC enterprise to a Hong Kong enterprise is reduced to 5% from a standard rate of 10% if the HongKong enterprise directly holds at least 25% of the equity interests of the PRC enterprise. There are also other conditions for enjoying the reducedwithholding tax rate according to other relevant tax rules and regulations. See Item 4.B “Business Overview—Operating and Financial Review andProspects—Regulations Relating to Tax—PRC Regulations on Dividend Withholding Tax.” We cannot assure you that our determination regardingour qualification to enjoy the preferential tax treatment will not be challenged by the relevant PRC tax authority that or we will be able to completethe necessary filings with the relevant PRC tax authority and enjoy the preferential withholding tax rate of 5% under the Double TaxationArrangement with respect to dividends to be paid by our PRC subsidiaries to our Hong Kong subsidiaries. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 42 of 194 Table of Contents41Our leased property interest may be defective and our right to lease the properties may be affected by such defects, which could causesignificant disruption to our business.Under the applicable PRC laws and regulations, all lease agreements are required to be registered with the local housing authorities. The landlordsof certain of our leased premises in China may have not completed the registration of their ownership rights or our leases with the relevantauthorities. Failure to complete these required registrations may expose our landlords, lessors and us to potential monetary fines. If theseregistrations are not obtained in a timely manner, or at all, we may be subject to monetary fines or may have to relocate our offices, which willincur the associated losses and adversely affect our normal business operations.The audit reports included in this annual report have been prepared by our independent registered public accounting firms whose work are notcurrently inspected fully by the Public Company Accounting Oversight Board and, as such, you may be deprived of the benefits of suchinspection.Our independent registered public accounting firms that issues the audit reports included in our annual reports filed with the U.S. Securities andExchange Commission, or the SEC, as auditors of companies that are traded publicly in the United States and firms registered with the PublicCompany Accounting Oversight Board (United States), or the PCAOB, is required by the laws of the United States to undergo regular inspectionsby the PCAOB to assess its compliance with the laws of the United States and professional standards.Because we have substantial operations within the PRC and the PCAOB is currently unable to conduct inspections of the work of our independentregistered public accounting firm as it relates to those operations without the approval of the Chinese authorities, our independent registered publicaccounting firms are not currently inspected fully by the PCAOB. This lack of PCAOB inspections in the PRC prevents the PCAOB from regularlyevaluating our independent registered public accounting firm’s audits and its quality control procedures. As a result, investors may be deprived ofthe benefits of PCAOB inspections.On May 24, 2013, PCAOB announced that it had entered into a Memorandum of Understanding on Enforcement Cooperation with the ChinaSecurities Regulatory Commission, or the CSRC, and the Ministry of Finance which establishes a cooperative framework between the parties forthe production and exchange of audit documents relevant to investigations in the United States and China. On inspection, it appears that thePCAOB continues to be in discussions with the Mainland China regulators to permit inspections of audit firms that are registered with PCAOB inrelation to the audit of Chinese companies that trade on U.S. exchanges. On December 7, 2018, the SEC and the PCAOB issued a joint statementhighlighting continued challenges faced by the U.S. regulators in their oversight of financial statement audits of U.S.-listed companies withsignificant operations in China. The joint statement reflects a heightened interest in this issue. On April 21, 2020, the SEC and the PCAOB issuedanother joint statement reiterating the PCAOB’s inability to inspect audit work paper and practices of registered accounting firms in China, withrespect to their audit work of U.S. reporting companies. In November 2020, the SEC and the PCAOB issued a third such statement and the SECstaff released disclosure guidance for China-based issuers. However, it remains unclear what further actions the SEC and PCAOB will take andwhat the impact of any such future actions on Chinese companies listed in the United States will be.Inspections of other firms that the PCAOB has conducted outside the PRC have identified deficiencies in those firms’ audit procedures and qualitycontrol procedures, which may be addressed as part of the inspection process to improve future audit quality. The inability of the PCAOB toconduct full inspections of auditors in the PRC makes it more difficult to evaluate the effectiveness of our independent registered public accountingfirms’s audit procedures or quality control procedures as compared to auditors outside the PRC that are subject to PCAOB inspections. Investorsmay lose confidence in our reported financial information and procedures and the quality of our financial statements. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 43 of 194 Table of Contents42Additionally, the PCAOB’s inability to inspect in full the work of our independent registered public accounting firms may result in regulatory negative consequences pursuant to U.S. law. On December 18, 2020, the Holding Foreign Companies Accountable Act (the “HFCA”) was signed into law. The HCFA requires the SEC to prohibit the securities of any “covered issuer,” including the Company, from being traded on any of the U.S. securities exchanges, including The Nasdaq Stock Market, or traded “over-the-counter,” if the auditor of the covered issuer’s financial statements is not subject to PCAOB inspection for three consecutive years, beginning in 2021. In the event that the PCAOB is unable to conduct full inspections in China or review audit documentation located within China for three consecutive years, which is subject to a variety of factors outside our control including the approval of Chinese authorities, our ADSs will be delisted from The Nasdaq Stock Market, which will limit the liquidity of our ADSs and our access to U.S. capital markets. The SEC is currently in the process of implementing the requirements of the Act, including through the release of the Interim Final Rule on Holding Foreign Companies Accountable Act Disclosure on March 24, 2021. The HFCA, related SEC rules, and any additional rulemaking efforts to increase U.S. regulatory access to audit information in China, could cause investor uncertainty for affected companies, including us, and the market price of our ADSs could be materially adversely affected.If the settlement reached between the SEC and the Big Four PRC-based accounting firms (including the Chinese affiliates of our independentregistered public accounting firms), concerning the manner in which the SEC may seek access to audit working papers from audits in China ofU.S.-listed companies, is not or cannot be performed in a manner acceptable to authorities in China and the United States, we could be unableto timely file future financial statements in compliance with the requirements of the Exchange Act.In late 2012, the SEC commenced administrative proceedings under Rule 102(e) of its Rules of Practice and also under the Sarbanes-Oxley Act of2002 against the mainland Chinese affiliates of the “Big Four” accounting firms (including the mainland Chinese affiliate of our independentregistered public accounting firm). A first instance trial of the proceedings in July 2013 in the SEC’s internal administrative court resulted in anadverse judgment against the firms. The administrative law judge proposed penalties on the Chinese accounting firms including a temporarysuspension of their right to practice before the SEC, although that proposed penalty did not take effect pending review by the Commissioners of theSEC. On February 6, 2015, before a review by the Commissioner had taken place, the Chinese accounting firms reached a settlement with the SECwhereby the proceedings were stayed. Under the settlement, the SEC accepted that future requests by the SEC for the production of documentswould normally be made to the CSRC. The Chinese accounting firms would receive requests matching those under Section 106 of the Sarbanes-Oxley Act of 2002, and would be required to abide by a detailed set of procedures with respect to such requests, which in substance would requirethem to facilitate production via the CSRC. The CSRC for its part initiated a procedure whereby, under its supervision and subject to its approval,requested classes of documents held by the accounting firms could be sanitized of problematic and sensitive content so as to render them capable ofbeing made available by the CSRC to U.S. regulators.Under the terms of the settlement, the underlying proceeding against the four PRC-based accounting firms was deemed dismissed with prejudice atthe end of four years starting from the settlement date, which was on February 6, 2019. Despite the final ending of the proceedings, thepresumption is that all parties will continue to apply the same procedures: i.e. the SEC will continue to make its requests for the production ofdocuments to the CSRC, and the CSRC will normally process those requests applying the sanitization procedure. We cannot predict whether, incases where the CSRC does not authorize production of requested documents to the SEC, the SEC will further challenge the four PRC-basedaccounting firms’ compliance with U.S. law. If additional challenges are imposed on the Chinese affiliates of the “big four” accounting firms, wecould be unable to timely file future financial statements in compliance with the requirements of the Exchange Act.In the event that the SEC restarts the administrative proceedings, depending upon the final outcome listed companies in the United States withmajor PRC operations may find it difficult or impossible to retain auditors in respect of their operations in the PRC, which could result in financialstatements being determined to not be in compliance with the requirements of the Exchange Act, including possible delisting. Moreover, anynegative news about any such future proceedings against these accounting firms may cause investor uncertainty regarding China-based, UnitedStates-listed companies and the market price of our ADSs may be adversely affected.If the Chinese affiliate of our independent registered public accounting firms was denied, even temporarily, the ability to practice before the SECand we were unable to timely find another registered public accounting firms to audit and issue an opinion on our financial statements, ourfinancial statements could be determined not to be in compliance with the requirements of the Exchange Act. Such a determination couldultimately lead to the delisting of our ADSs from the Nasdaq Global Select Market or deregistration from the SEC, or both, which wouldsubstantially reduce or effectively terminate the trading of our ADSs in the United States. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 44 of 194 Table of Contents43Risks Related to Our Class A Ordinary Shares and ADSsThe trading prices of our ADSs are likely to be volatile, which could result in substantial losses to investors.The trading prices of our ADSs have been and are likely to continue to be volatile and have fluctuated and may continue to fluctuate widely due tofactors beyond our control. This may happen because of broad market and industry factors, like the performance and fluctuation in the marketprices or the underperformance or deteriorating financial results of other similarly situated companies that have listed their securities in the U.S. inrecent years. The securities of some of these companies have experienced significant volatility since their initial public offerings, including, insome cases, substantial price declines in the trading prices of their securities. The trading performances of these companies’ securities after theirofferings may affect the attitudes of investors toward such companies listed in the United States, which consequently may affect the tradingperformance of our ADSs, regardless of our actual operating performance. In addition, securities markets may from time to time experiencesignificant price and volume fluctuations that are not related to our operating performance, such as the large decline in share prices in the UnitedStates and other jurisdictions. For example, the recent coronavirus pandemic and the recent decrease in oil prices have had a significant negativeimpact on securities market prices and contributed to increased volatility. These and other factors may continue to affect the broader securitiesmarkets and, consequently, our business and results of operations.In addition to market and industry factors, the price and trading volume for our ADSs may be highly volatile for factors specific to our ownoperations, including the following:●variations in our revenues, earnings and cash flow;●announcements of new product and service offerings, investments, acquisitions, strategic partnerships, joint ventures, or capitalcommitments by us or our competitors;●changes in the performance or market valuation of our company or our competitors;●changes in financial estimates by securities analysts;●changes in the number of our users and customers;●fluctuations in our operating metrics;●failures on our part to realize monetization opportunities as expected;●additions or departures of our key management and personnel;●release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities;●detrimental negative publicity about us, our competitors or our industry;●market conditions or regulatory developments affecting us or our industry; and●potential litigations or regulatory investigations.Any of these factors may result in large and sudden changes in the trading volume and the price at which our ADSs will trade. In the past,shareholders of a public company often brought securities class action suits against the listed company following periods of instability in themarket price of that company’s securities. If we were involved in a class action suit, it could divert a significant amount of our management’sattention and other resources from our business and operations, which could harm our results of operations and require us to incur significantexpenses to defend the suit. Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capitalin the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a materialadverse effect on our financial condition and results of operations. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 45 of 194 Table of Contents44We have granted and may grant additional employee share options and other share-based compensation awards in the future. Any additionalgrant of employee share options and other share-based compensation awards in the future may have a material adverse effect on our results ofoperations.We have adopted and may adopt employee share option plans for the purpose of granting share-based compensation awards to our employees,officers, directors and other eligible persons to incentivize their performance and align their interests with ours. For more information on theseshare incentive plans, see Item 6. B “Compensation—2018 Share Incentive Plan” and “—2019 Performance Incentive Plan.” As a result of thesegrants and potential future grants, we expect to continue to incur significant share-based compensation expenses in the future. The amount of theseexpenses is based on the fair value of the share-based awards. We account for compensation costs for all share options using a fair-value-basedmethod and recognize expenses in our combined and consolidated statements of comprehensive income and other comprehensive income inaccordance with U.S. GAAP. The expenses associated with share-based compensation will decrease our profitability, perhaps materially, and theadditional awards issued under share-based compensation plans will dilute the ownership interests of our shareholders, including holders of ourADSs. However, if we limit the scope of our share-based compensation plan, we may not be able to attract or retain key personnel who expect to becompensated by such share-based awards.We are an emerging growth company within the meaning of the Securities Act and may take advantage of certain reduced reportingrequirements.We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various requirementsapplicable to other public companies that are not emerging growth companies, including, most significantly, not being required to comply with theauditor attestation requirements of Section 404 of the Sarbanes-Oxley Act for so long as we are an emerging growth company. As a result, if weelect not to comply with such auditor attestation requirements, our investors may not have access to certain information they may deem important.The JOBS Act also provides that an emerging growth company does not need to comply with any new or revised financial accounting standardsuntil such date that a private company is otherwise required to comply with such new or revised accounting standards. However, we have elected to“opt out” of this provision and, as a result, we will comply with new or revised accounting standards as required when they are adopted for publiccompanies. This decision to opt out of the extended transition period under the JOBS Act is irrevocable.We cannot predict if investors will find our ADSs less attractive due to our status under the JOBS Act. If some investors find our ADSs lessattractive as a result, there may be a less active trading market for our ADSs and our ADS price may be more volatile.We incur increased costs as a result of being a public company, and will incur further increased costs after we cease to qualify as an “emerginggrowth company.”We have incurred and expect to continue to incur significant legal, accounting and other expenses as a result of our becoming a public company.The Sarbanes-Oxley Act, as well as rules subsequently implemented by the SEC and Nasdaq, imposes various requirements on the corporategovernance practices of public companies. These rules and regulations increase our legal and financial compliance costs and make some corporateactivities more time-consuming and costly. After we are no longer an “emerging growth company,” we expect to incur significant expenses anddevote substantial management effort toward ensuring compliance with the requirements of Section 404 of the Sarbanes-Oxley Act and the otherrules and regulations of the SEC. For example, we have incurred and will continue to incur additional costs associated with our public companyreporting requirements.The sale or availability for sale, or perceived sale or availability for sale, of substantial amounts of our ADSs could adversely affect their marketprice.Sales of substantial amounts of our ADSs in the public market, or the perception that these sales could occur, could adversely affect the marketprice of our ADSs and could materially impair our ability to raise capital through equity offerings in the future. There were 143,603,340 ADSs(equivalent to 2,154,050,096 Class A and Class B ordinary shares) outstanding as of March 31,2021. We may also issue additional options in thefuture that may be exercised for additional Class A ordinary shares. We cannot predict what effect, if any, market sales of securities held by oursignificant shareholders or any other shareholder or the availability of these securities for future sale will have on the market price of our ADSs. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 46 of 194 Table of Contents45Our dual-class share structure with different voting rights limits investors’ ability to influence corporate matters and could discourage othersfrom pursuing any change of control transactions.We have and will maintain a dual-class share structure such that our ordinary shares consist of Class A ordinary shares and Class B ordinary shares.In respect of matters requiring the votes of shareholders, a holder of Class B ordinary shares is entitled to 20 votes per share, while holders ofClass A ordinary shares are entitled to one vote per share based on our dual-class share structure. Each Class B ordinary share is convertible intoone Class A ordinary share by the holder thereof, subject to certain conditions, while Class A ordinary shares are not convertible into Class Bordinary shares under any circumstances. Upon any sale of Class B ordinary shares by a holder thereof to any person other than Mr. Tianhua Wu orany entity which is not a permitted affiliate to Mr. Tianhua Wu, such Class B ordinary shares are automatically and immediately converted into thesame number of Class A ordinary shares.Mr. Tianhua Wu and his family beneficially own all of our issued Class B ordinary shares. As of March 31, 2021, these Class B ordinary sharesconstitute 13.6% of our total issued and outstanding share capital and 75.8% of the aggregate voting power of our total issued and outstandingshare capital due to the disparate voting powers associated with our dual-class share structure. See Item 7.A “Major Shareholders.” As a result ofthe dual-class share structure and the concentration of ownership, holders of Class B ordinary shares will have considerable influence over matterssuch as decisions regarding mergers, consolidations and the sale of all or substantially all of our assets, election of directors and other significantcorporate actions. Such holders may take actions that are not in the best interest of us or our other shareholders. This concentration of ownershipmay discourage, delay or prevent a change in control of our company, which could have the effect of depriving our other shareholders of theopportunity to receive a premium for their shares as part of a sale of our company and may reduce the price of our ADSs. This concentrated controllimits holders of our Class A ordinary shares and ADSs ability to influence corporate matters and could discourage others from pursuing anypotential merger, takeover or other change of control transactions that holders of Class A ordinary shares and ADSs may view as beneficial.As a result of Mr. Tianhua Wu’s control of our Class B ordinary shares, Mr. Wu will effectively control the outcome of shareholder actions inour company and may take actions that might not be beneficial to holders of our Class A ordinary shares or ADSs.Mr. Tianhua Wu holds the voting rights attached to all of our Class B ordinary shares and to all of the options awarded under the 2018 ShareIncentive Plan and 2019 Performance Incentive Plan. As each Class B ordinary share entitles its holder to 20 votes per share, such Class B ordinaryshares in the aggregate represent 75.8% of the combined total voting rights in our company. Mr. Wu’s shareholding, in particular the greater votingrights of Class B ordinary shares he holds, gives him the power to control any actions that require shareholder approval under Cayman Islands law,our memorandum and articles of association, and the Nasdaq requirements. Mr. Wu could have sufficient voting rights to determine the outcome ofall matters requiring shareholder approval even if he should, at some point in the future, hold considerably less than a majority of the combinedtotal of our outstanding ordinary shares. Mr. Wu’s voting power may prevent a transaction involving a change of control of us, includingtransactions in which holders of our Class A ordinary shares or ADSs might otherwise receive a premium for securities over the then-currentmarket price. Similarly, Mr. Wu may approve a merger or consolidation of our company which may result in holders of our Class A ordinary sharesor ADSs receiving a stake (either in the form of shares, debt obligations or other securities) in the surviving or new consolidated company whichmay not operate our current business model and dissenter rights may not be available to such holders in such an event.We are a foreign private issuer under the Exchange Act and therefore are exempt from certain provisions applicable to U.S. domestic publiccompanies.Because we qualify as a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules andregulations in the United States that are applicable to U.S. domestic issuers, including but not limited to:●the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K;●the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered underthe Exchange Act;●the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability forinsiders who profit from trades made in a short period of time; and Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 47 of 194 Table of Contents46●the selective disclosure rules by issuers of material nonpublic information under Regulation FD.We are required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we intend to publish our resultsin press releases, distributed pursuant to the rules and regulations of the Nasdaq. Press releases relating to financial results and material events willalso be furnished to the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC will be less extensive andless timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, investors may not avail themselves of the sameinformation or protection that would be available to investors in a U.S. domestic issuer.Because we are a foreign private issuer organized under the laws of a non-U.S. country, it may be more difficult for investors and regulators tobring actions against us and our officers and directors.We are organized under the laws of the Cayman Islands, and many of our subsidiaries are organized under the laws of other jurisdictions outsidethe United States, including the PRC, Hong Kong, New Zealand, Singapore, and Australia. Because we and many of our subsidiaries are not U.S.companies and carry out a majority of our operations outside the United States, it may be more difficult for investors and regulators to bring suitsagainst us and our management, including class action securities law and fraud claims, than it would be to bring claims against a U.S. company.As a foreign private issuer with ADSs listed on the Nasdaq Global Select Market, we follow certain home country corporate governancepractices instead of certain Nasdaq requirements.As a foreign private issuer whose ADSs are listed on the Nasdaq Global Select Market, we are permitted to follow certain home country corporategovernance practices instead of certain Nasdaq requirements. A foreign private issuer that elects to follow its home country practice must submit toThe Nasdaq Stock Market LLC a written statement from an independent counsel in such issuer’s home country certifying that the issuer’s practicesare not prohibited by the home country’s laws. In addition, a foreign private issuer must disclose in its annual reports filed with the SEC eachNasdaq requirement with which it does not comply followed by a description of its applicable home country practice.As a company incorporated in the Cayman Islands with ADSs listed on the Nasdaq Global Select Market, we follow our home country practiceinstead of Nasdaq requirements that mandate that:●the board of directors be comprised of a majority of independent directors;●the directors be selected or nominated by a majority of the independent directors or a nomination committee comprised solely ofindependent directors;●the board of directors adopt a formal written charter or board resolution addressing the director nominations process and such relatedmatters as may be required under the U.S. federal securities laws; and●the compensation of our executive officers be determined or recommended by a compensation committee comprised solely ofindependent directors.We are a “controlled company” as defined under the Nasdaq Stock Market Rules and, as a result, can rely on exemptions from certaincorporate governance requirements.We are a “controlled company” as defined under the Nasdaq Stock Market Rules because Mr. Tianhua Wu, our founder, director and chiefexecutive officer, holds more than 50% of our total voting power. For so long as we remain as a controlled company as defined above, we arepermitted to elect to, and may, rely on certain exemptions from corporate governance requirements otherwise applicable. As a result, ourshareholders may not have the same protection afforded to shareholders of companies that are subject to these corporate governance requirements. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 48 of 194 Table of Contents47The dual-class structure of our ordinary shares may adversely affect the trading market for our ADSs.Certain shareholder advisory firms have announced changes to their eligibility criteria for inclusion of shares of public companies on certainindices, including the S&P 500, to exclude companies with multiple classes of shares and companies whose public shareholders hold no more than5% of total voting power from being added to such indices. In addition, several shareholder advisory firms have announced their opposition to theuse of multiple class structures. As a result, the dual class structure of our ordinary shares may prevent the inclusion of our ADSs representingClass A ordinary shares in such indices and may cause shareholder advisory firms to publish negative commentary about our corporate governancepractices or otherwise seek to cause us to change our capital structure. Any such exclusion from indices could result in a less active trading marketfor our ADSs. Any actions or publications by shareholder advisory firms critical of our corporate governance practices or capital structure couldalso adversely affect the value of our ADSs.Shareholders may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. courts may be limited,because we are registered under Cayman Islands law.We are an exempted company limited by shares incorporated under the laws of the Cayman Islands. Our corporate affairs are governed by ourmemorandum of association and articles of association, the Companies Act of the Cayman Islands and the common law of the Cayman Islands.The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors tous under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands isderived in part from comparatively limited judicial precedents in the Cayman Islands as well as from the common law of England, the decisions ofwhose courts are of persuasive authority, but are not binding, on a court in the Cayman Islands. The rights of our shareholders and the fiduciaryresponsibilities of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedents insome jurisdictions in the United States. In particular, the Cayman Islands has a less developed body of securities laws than the United States. SomeU.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In addition,Cayman Islands companies may not have the standing to initiate a shareholder derivative action in a federal court of the United States.Shareholders of Cayman Islands exempted companies like ours have no general rights under the Cayman Islands law to inspect corporate recordsor to obtain copies of lists of shareholders of these companies. Our directors have the discretion under our fourth amended and restated articles ofassociation to determine such times and such days that our register and branch register of members, as the case may be, shall be open to inspectionby our shareholders or other persons. This may make it more difficult for shareholders to obtain the information needed to establish any factsnecessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.Certain corporate governance practices in the Cayman Islands differ significantly from requirements for companies incorporated in otherjurisdictions such as the United States. We rely on home country practice with respect to certain corporate governance matters. Our shareholdersmay be afforded less protection than they otherwise would have under rules and regulations applicable to U.S. domestic issuers.As a result of all of the above, public shareholders may have more difficulties in protecting their interests in the face of actions taken by themanagement, members of the board of directors or controlling shareholders than they would have as public shareholders of a company incorporatedin the United States.Holders of our ADSs may not be able to participate in rights offerings and may experience dilution of your holdings as a result.We may from time to time distribute rights to our shareholders, including rights to acquire our securities. Under the deposit agreement for theADSs, the depositary will not offer those rights to ADS holders unless both the rights and the underlying securities to be distributed to ADS holdersare either registered under the Securities Act, or exempted from registration under the Securities Act with respect to all holders of ADSs. We areunder no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to cause such aregistration statement to be declared effective. In addition, we may not be able to take advantage of any exemptions from the registration underthe Securities Act. Accordingly, holders of the ADSs may be unable to participate in our rights offerings and may experience dilution in theirholdings as a result. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 49 of 194 Table of Contents48Judgments obtained against us by our shareholders may not be enforceable in our home jurisdiction.We are a Cayman Islands company and a substantial majority of our assets are located outside of the United States. A significant percentage of ourcurrent brokerage operations are conducted in New Zealand. In addition, a significant majority of our current directors and officers are nationalsand residents of jurisdictions other than the United States. As a result, it may be difficult or impossible for shareholders to bring an action againstus or against these individuals in the United States in the event that they believe that their rights have been infringed under the U.S. federalsecurities laws or otherwise. Even if shareholders are successful in bringing an action of this kind, the laws of the Cayman Islands, New Zealand,China and other jurisdictions where we operate may render them unable to enforce a judgment against our assets or the assets of our directors andofficers. There are uncertainties as to whether Cayman Islands courts would:●recognize or enforce against us, judgments of courts of the U.S. based on certain civil liability provisions of the U.S. securities laws; and●impose liabilities against us, in original actions brought in the Cayman Islands, based on certain civil liability provisions of the U.S.securities laws that are penal in nature.There is no statutory recognition in the Cayman Islands of judgments obtained in the United States, although the courts of the Cayman Islands willunder certain circumstances recognize and enforce a non-penal judgment of a foreign court of competent jurisdiction without retrial on the meritsprovided that (a) such courts had proper jurisdiction over the parties subject to such judgment; (b) such courts did not contravene the rules ofnatural justice of the Cayman Islands; (c) such judgment was not obtained by fraud; (d) the enforcement of the judgment would not be contrary tothe public policy of the Cayman Islands; (e) no new admissible evidence relevant to the action is submitted prior to the rendering of the judgmentby the courts of the Cayman Islands; and (f) there is due compliance with the correct procedures under the laws of the Cayman Islands.If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market price forour ADSs and trading volume could decline.The trading market for our ADSs depends in part on the research and reports that securities or industry analysts publish about us or our industry. Ifresearch analysts do not establish and maintain adequate research coverage or if the analysts who cover us downgrade our ADSs or publishinaccurate or unfavorable research about our industry, the market price for our ADSs might decline. If one or more of these analysts cease coverageof our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause the marketprice or trading volume for our ADSs to decline.The depositary for our ADSs will give us a discretionary proxy to vote our Class A ordinary shares underlying your ADSs if holders of ourADSs do not vote at shareholders’ meetings, except under limited circumstances, which could adversely affect our ADS holders’ interests.Under the deposit agreement for the ADSs, if a holder of our ADSs does not give instructions for voting the Class A ordinary shares underlyingtheir ADSs, the depositary will give us a discretionary proxy to vote those Class A ordinary shares at the shareholders’ meeting unless:●we have failed to timely provide the depositary with a notice of meeting and related voting materials;●we have instructed the depositary that we do not wish a discretionary proxy to be given;●we have informed the depositary that there is substantial opposition as to a matter to be voted on at the meeting;●a matter to be voted on at the meeting would have a material adverse impact on shareholders; or●the voting at the meeting is to be made on a show of hands. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 50 of 194 Table of Contents49The effect of this discretionary proxy is that holders of our ADSs cannot prevent our Class A ordinary shares underlying their ADSs from beingvoted at the shareholder meeting, except under the circumstances described above. This may make it more difficult for shareholders to influencethe management of our company. Holders of our Class B ordinary shares are not subject to this discretionary proxy.The deposit agreement may be amended or terminated without the consent of holders of our ADSs.We and the depositary may amend or terminate the deposit agreement without the consent of holders of our ADSs. Such amendment or terminationmay be done in favor of our company. Holders of our ADSs are entitled to a prior notice in the event of a materially prejudicial amendment ortermination thereof. If holders continue to hold their ADSs after an amendment to the deposit agreement, they agree to be bound by the depositagreement as amended. The deposit agreement may be terminated at any time upon a prior written notice. Upon the termination of the depositagreement, our company will be discharged from all obligations under this deposit agreement except for its obligations to the depositarythereunder.If we do not pay dividends in the future, investors must rely on price appreciation of our ADSs for return on your investment.Our board of directors may from time to time declare dividends or authorize other distributions to our shareholders, subject to certain restrictionsunder the Cayman Islands law, namely that our company may only pay dividends out of profits or share premium, and provided always that in nocircumstances may a dividend be paid out of share premium if this would result in our company being unable to pay its debts as they fall due in theordinary course of business. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amountrecommended by our board of directors. Even if our board of directors decides to declare and pay dividends, the timing, amount and form of futuredividends, if any, will depend on, among other things, our future results of operations and cash flow, our capital requirements and surplus, theamount of distributions, if any, received by us from our subsidiary, our financial condition, contractual restrictions and other factors deemedrelevant by our board of directors. Accordingly, the return on an investment in our ADSs will likely depend entirely upon any future priceappreciation of our ADSs. There is no guarantee that our ADSs will appreciate in value or even maintain the price at which investors purchased theADSs. Investors may not realize a return on their investment in our ADSs and may even lose their entire investment in our ADSs.Holders of our ADSs may not receive dividends or other distributions on our Class A ordinary shares and may not receive any value for them, ifit is illegal or impractical to make them available to.To the extent that we decide to pay a dividend or make other distributions in the future, the depositary of our ADSs has agreed to pay to holders ofour ADSs such cash dividends or other distributions it or the custodian receives on Class A ordinary shares or other deposited securities underlyingour ADSs, after deducting its fees and expenses. Holders of our ADSs will receive these distributions in proportion to the number of Class Aordinary shares their ADSs represent. However, the depositary is not responsible if it decides that it is unlawful or impractical to make adistribution available to any holders of ADSs. For example, it would be unlawful to make a distribution to a holder of ADSs if there are securitiesthat require the registration under the Securities Act but such securities are not properly registered or distributed under an applicable exemptionfrom the registration. The depositary may also determine that it is not feasible to distribute certain property through the mail. Additionally, thevalue of certain distributions may be less than the cost of mailing them. In these cases, the depositary may determine not to distribute such property.We have no obligation to register under the U.S. securities laws any ADSs, Class A ordinary shares, rights or other securities received through suchdistributions. We also have no obligation to take any other action to permit the distribution of ADSs, Class A ordinary shares, rights or anythingelse to holders of ADSs. This means that holders of our ADSs may not receive distributions we make on our Class A ordinary shares or any valuefor them if it is illegal or impractical to make them available to them. These restrictions may cause a material decline in the value of our ADSs. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 51 of 194 Table of Contents50Holders of our ADSs may be subject to limitations on the transfer of ADSs.ADSs are transferable on the books of the depositary. However, the depositary may close its books at any time or from time to time when it deemsexpedient in connection with the performance of its duties. The depositary may close its books from time to time for a number of reasons, includingin connection with corporate events such as a rights offerings when the depositary needs to maintain an exact number of ADS holders on its booksfor a specified period. The depositary may also close its books in emergencies, and on weekends and public holidays in the United States. Thedepositary may refuse to deliver, transfer or register the transfers of our ADSs generally when our share register or the books of the depositary areclosed, or at any time if we or the depositary think that it is advisable to do so because of any requirement of law or of any government orgovernmental body, or under any provision of the deposit agreement, or for any other reason in accordance with the terms of the deposit agreement.As a result, holders of our ADSs may be unable to transfer their ADSs when they wish to under these circumstances.Our amended and restated memorandum and articles of association contain anti-takeover provisions that could discourage a third party fromacquiring us, which could limit our shareholders’ opportunity to sell their shares, including Class A ordinary shares represented by the ADSs,at a premium.The Company operates pursuant to a fourth amended and restated memorandum and articles of association. Some provisions of our fourth amendedand restated memorandum and articles of association may discourage, delay or prevent a change of control of our company or management thatshareholders may consider favorable, including provisions that: authorize our board of directors to issue preference shares in one or more series andto designate the price, rights, preferences, privileges and restrictions of such preference shares without any further vote or action by ourshareholders; and limit the ability of shareholders to requisition and convene general meetings of shareholders. Under Cayman Islands law, ourdirectors may only exercise the rights and powers granted to them under our fourth amended and restated memorandum and articles of associationfor a proper purpose and for what they believe in good faith to be in the best interests of our company. However, these provisions could still havethe effect of depriving our shareholders of an opportunity to sell their shares at a premium over prevailing market prices by discouraging thirdparties from seeking to obtain control of our company in a tender offer or similar transaction.We may be classified as a passive foreign investment company, which could result in adverse U.S. federal income tax consequences to U.S.investors of our ADSs or Class A ordinary shares.Depending upon the value of our ADSs and Class A ordinary shares and the nature and composition of our assets and income over time, we couldbe classified as a passive foreign investment company, or PFIC, for U.S. federal income tax purposes. Based on the expected composition of ourincome and assets and the value of our assets, including goodwill, we do not expect to be a PFIC for the taxable year ending December 31, 2020.Despite our expectation, there can be no assurance that we will not be a PFIC in the current taxable year or any future taxable year as PFIC status istested each taxable year and will depend on the composition of our assets and income and the value of our assets in each such taxable year.We will be classified as a PFIC for any taxable year if either (i) at least 75% of our gross income for the taxable year is passive income or (ii) atleast 50% of the value of our assets (based on a quarterly value of the assets during the taxable year) is attributable to assets that produce or areheld for the production of passive income. Passive income generally includes interest, and cash and loans are generally considered passive assets.In determining the average percentage value of our gross assets, the aggregate value of our assets will generally be deemed to be equal to ourmarket capitalization (determined by the sum of the aggregate value of our outstanding equity) plus our liabilities. Accordingly, we could become aPFIC for the current or any future taxable year if our market capitalization were to decrease while we hold substantial cash, cash equivalents orother assets that produce or are held for the production of passive income such as loans to customers. In addition, we expect to increase our marginloan business (where we extend margin loans using our own capital rather than Interactive Brokers’ capital) which will increase our passive interestincome. Furthermore, we could also be a PFIC if we were not treated as the owner of our consolidated affiliated entities for U.S. tax purposes.Because there are uncertainties in the application of the relevant PFIC rules, it is possible that the Internal Revenue Service, or IRS, may challengeour classification of certain income and assets as non-passive or our valuation of our tangible and intangible assets, which could result in adetermination that we were a PFIC for the current or subsequent taxable years. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 52 of 194 Table of Contents51If we were a PFIC in any taxable year in which a U.S. investor holds our ADSs or Class A ordinary shares, the U.S. investor would generally besubject to additional taxes and interest charges on certain “excess” distributions we make and on the gain, if any, recognized on the disposition ordeemed disposition of such U.S. investor’s ADS or Class A ordinary shares, even if we are no longer a PFIC in the year of distribution ordisposition. Moreover, such U.S. investor would also be subject to special U.S. tax reporting requirements. For more information on the U.S. taxconsequences to certain U.S. investors that would result from our classification as a PFIC, see Item 10.E “Taxation—United States Federal IncomeTaxation—Passive Foreign Investment Company.”Item 4. Information on the CompanyA. History and Development of the CompanyThe Company, known commercially in the Asia-Pacific region as “Tiger Brokers,” is a Cayman Islands exempted company incorporated inJanuary 2018 and operating under the Companies Law of the Cayman Islands. As of the date of this report, our authorized share capital isUS$50,000 divided into 5,000,000,000 shares.We commenced our technology research and development in June 2014 through Ningxia Xiangshang Rongke Technology Development Co., LTD,or Ningxia Rongke.Ningxia Rongke acquired a New Zealand registered financial service provider, Tiger Holdings Group Limited, formerly known as TransactionHoldings (N.I.) Limited, in August 2015, which is currently wholly-owned by one of Ningxia Rongke’s subsidiaries. In August 2016, NingxiaRongke acquired Tiger Brokers (NZ) Limited,also a registered financial service provider in New Zealand. Substantially all of our revenues weregenerated from Tiger Holdings Group Limited in 2016 and 2017, and from Tiger Brokers (NZ) Limited in 2018 and 2019. Tiger Brokers (NZ)Limited was known as Top Capital Partners Limited prior to June 2019.Reorganization, IPO and Acquisition of MarscoTo facilitate foreign investment in our business, starting from early 2018, we began to establish an offshore holding structure for our company. Aspart of the efforts, we incorporated a Cayman Islands exempted company, UP Fintech Holding Limited, or our Company, as our offshore holdingcompany in January 2018. In February 2018, we established Up Fintech International Limited in Hong Kong, or Up International, as ourintermediate holding company, which in turn established our WFOEs, Beijing Bohu, formerly known as Ningxia Xiangshang Yixin TechnologyCo., LTD, or Ningxia Yixin in May 2018, and Beijing Xiangshang Yixin Technology Co., LTD, or Beijing Yixin, in July 2018.To enable our effective control over the PRC operating entities and their subsidiaries including Tiger Brokers (NZ) Limited (at the time), NingxiaYixin entered into variable interest entity, or VIE, contractual arrangements with Ningxia Rongke, and Beijing Yixin entered into substantiallysimilar VIE arrangements with Beijing Xiangshang Yiyi Technology Co., LTD, or Beijing Yiyi, which we collectively refer to as our VIEs in thisreport, and their respective shareholders. These contractual arrangements enable us to exercise effective control over our VIEs and their respectivesubsidiaries, receive substantially all of the economic benefits of such entities, and have an exclusive option to purchase all or part of the equityinterests in and assets of them to the extent permitted by the applicable laws and regulations. For more details, please see Item 4 “Information onthe Company—Contractual Arrangements with the VIEs and Their Respective Shareholders.”In June 2018, we formed a wholly-owned subsidiary Up Fintech Global Holdings Limited in British Virgin Islands, or BVI, first as the holdingcompany to hold our wholly-owned U.S. entity, Tiger Fintech Holdings Inc., or Tiger Fintech Holdings and later as the holding company to holdour subsidiaries in other jurisdictions. In August 2018, Tiger Fintech Holdings acquired 100% of the equity interests of Wealthn LLC, a registeredinvestment advisor in the United States. Wealthn LLC provides investment advisory services for high-net-worth individuals, family offices andinvestment companies registered under the Investment Company Act of 1940 such as TigerShares Trust. In November 2018, Tiger FintechHoldings completed the acquisition of 100% of the equity interests in US Tiger Securities, Inc. (formerly known as JFD Securities, Inc.), a U.S.registered broker-dealer. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 53 of 194 Table of Contents52In July 2018, we established another wholly-owned subsidiary Xiangshang Upfintech Holding Limited, a BVI company, to hold other licensedoperating companies including its wholly-owned operating entity in Singapore, Tiger Fintech (Singapore) Pte. Ltd., which was established inMarch 2018. In October 2018, Ningxia Rongke transferred all equity interests in Tiger Brokers (NZ) Limited to Tiger Fintech (Singapore) Pte. Ltd.As a result, Tiger Brokers (NZ) Limited is no longer held by our VIEs in China. In November 2018, Tiger Brokers (NZ) Limited acquired 100% ofthe equity interests in Fleming Funds Management PTY Limited (“Fleming”), which was established in Australia in January 2006 and has beenauthorized as a licensed financial services provider in Australia since July 2006.In September 2018, we established JV Uptech Holding Limited in BVI as a holding company to expand our business in Hong Kong. InOctober 2018, JV Uptech Holding Limited acquired 100% of the equity interests in Kastle Limited, which, in January 2019, was granted a licenseto carry on trust and company service business in Hong Kong. In January 2019, we entered into an agreement to purchase 100% equity interest ofTung Chi Consulting Limited, a licensed insurance broker in Hong Kong, and the acquisition completed in February 2019.In March 2019, we completed our initial public offering of 14,950,000 of our ADSs, each representing 15 of our Class A ordinary shares.Concurrently, one of our existing shareholders, IB Global Investments LLC, a member of the Interactive Brokers Group of companies, purchased13,125,000 Class A ordinary shares in a private placement.In July 2019, we acquired 100% of the equity interests in Marsco for total consideration of US$9,348,290 in a combination of US$6,348,290 ofcash and US$3,000,000 of Class A ordinary shares of the Company. Marsco is a licensed U.S. self-clearing broker-dealer that focuses onempowering self-directed investors with the necessary tools to manage their portfolios. Marsco brings in rich broker dealer experience in executionand clearing.Recent DevelopmentsIn February 2021, we completed a financing transaction in which a group of investors led by an affiliate of Xiaomi Corporation purchasedconvertible notes in an aggregate principal amount of US$65 million through a private placement. The convertible notes will mature in 2026 unlesspreviously converted.In April 2021, we completed a financing transaction in which a group of investors purchased convertible notes in an aggregate principal amount ofUS$90 million through a private placement. The convertible notes will mature in 2026 unless previously converted.Our Corporate InformationThe location of our principal executive offices is 18/F, Grandyvic Building, No. 1 Building, No. 16 Taiyanggong Middle Road, Chaoyang District,Beijing, 100020 PRC and our telephone number at this address is +86-10-56216660. Our registered office in the Cayman Islands is P.O. Box 2547,23 Lime Tree Bay Avenue, Grand Cayman, KY1-1104, Cayman Islands. Our agent for service of process in the United States is Puglisi &Associates, located at 850 Library Avenue, Suite 204 Newark, Delaware 19711 and the telephone number of our agent is (302) 738-6680.Investors should contact us for any inquiries through the address and telephone number of our principal executive offices. Our websiteis www.itiger.com. Information contained in, or accessible through, our website is not a part of, and is not incorporated into, this report.Contractual Arrangements with the VIEs and Their Respective ShareholdersWe use contractual arrangements to control our VIEs due to restrictions or prohibitions on foreign ownership of Internet technology services andother related businesses in China. According to the Negative List (as defined elsewhere in this report) that took effect on July 23, 2020, therestrictions on the controlling stake of Internet technology service companies still exist, and foreign investments in this business are also restrictedby other qualifications and requirements under relevant regulations in China. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 54 of 194 Table of Contents53Our WFOEs, Beijing Bohu and Beijing Yixin, respectively, have the sole discretion to receive from the relevant VIE an annual service fee at anamount of at least 99% of the respective VIE’s annual net profit. In addition, Beijing Bohu and Beijing Yixin are entitled to receive certain fees forother technical services at the amount mutually agreed upon by Beijing Bohu or Beijing Yixin and the respective VIE. Beijing Bohu and BeijingYixin did not collect any service fees from our VIEs in the last two fiscal years, and will make discretionary determinations on whether to collectservices fees and on the amount of fees to be collected. We do not have unfettered access to Beijing Bohu’s, Beijing Yixin’s and the respectiveVIEs’ revenues due to PRC legal restrictions on the payment of dividends by PRC companies, foreign exchange control restrictions, and therestrictions on foreign investment, among others. For more details and risks related to our variable interest entity structure, please see Item 4“Information on the Company—Contractual Arrangements with Our VIEs and Their Respective Shareholders” and “Item 3.D Risk Factors—RisksRelated to Our Corporate Structure.”As a result of our direct ownership in Beijing Bohu and Beijing Yixin, and the contractual arrangements with the VIEs, we are regarded as theprimary beneficiary of our VIEs, and we treat them as our consolidated affiliated entities under U.S. GAAP. We have consolidated the financialresults of our VIEs in our consolidated financial statements in accordance with U.S. GAAP.Agreements that provide us with effective control over the VIEsPowers of Attorney. Pursuant to the Powers of Attorney dated December 17, 2018 among Ningxia Yixin and each of the shareholders of NingxiaRongke, which restated and amended the version dated June 7, 2018, each of the shareholders of Ningxia Rongke irrevocably authorizes NingxiaYixin to act as its attorney-in-fact to exercise all of its rights as a shareholder of Ningxia Rongke, including, but not limited to, the right to conveneand attend shareholders’ meetings, vote on any resolution that requires a shareholder vote, such as the sale, transfer, disposal and pledge of all orpart of the equity interest owned by such shareholder, and decide on the appointment and removal of directors, supervisors and officers. NingxiaYixin can assign or transfer under the aforementioned Powers of Attorney at its own discretion to any other person or entity without notice to orconsent from any or all of the shareholders of Ningxia Rongke. The Power of Attorney will remain effective and irrevocable until such shareholderis no longer a shareholder of Ningxia Rongke.On October 30, 2018, Beijing Yixin and each of the shareholders of Beijing Yiyi entered into an Power of Attorney, which contain termssubstantially similar to the Powers of Attorney executed by the shareholders of Ningxia Rongke described above.Exclusive Option Contracts. Pursuant to the Exclusive Option Contract dated December 17, 2018, among Ningxia Yixin, Ningxia Rongke andeach shareholder of Ningxia Rongke, which restated and amended the version dated June 7, 2018, the shareholders of Ningxia Rongke haveirrevocably granted Ningxia Yixin an exclusive option to purchase all or part of their equity interests in Ningxia Rongke.Ningxia Rongke has irrevocably granted Ningxia Yixin an exclusive option to purchase all or part of its assets. Ningxia Yixin or its designatedperson(s) may exercise such options at RMB10 or at the lowest price permitted under applicable PRC laws, whichever is higher. The shareholdersof Ningxia Rongke undertake that, without Ningxia Yixin’s prior written consent, they will not, among other things, (i) create any pledge orencumbrance on their equity interests in Ningxia Rongke, (ii) transfer or otherwise dispose of their equity interests in Ningxia Rongke, (iii) changeNingxia Rongke’s registered capital, (iv) supplement, revise or amend Ningxia Rongke’s articles of association, or (v) allow Ningxia Rongke tomerge with any other entity. In addition, Ningxia Rongke undertakes that, without Ningxia Yixin’s prior written consent, it will not, among otherthings, create any pledge or encumbrance on any of its assets, or enter into any material contracts (except in the ordinary course of business). TheExclusive Option Contract will remain effective for a term of ten years and renewable in accordance with the sole discretion of Ningxia Yixin.On October 30, 2018, Beijing Yixin and each shareholder of Beijing Yiyi entered into an Exclusive Option Contract which contain termssubstantially similar to the Exclusive Option Contract described above.Spouse Consent Letters. Pursuant to the Spouse Consent Letters dated December 17, 2018, the spouse of each married shareholder of NingxiaRongke which restated and amended the version dated June 7, 2018, unconditionally and irrevocably agreed not to assert any rights over the equityinterest in Ningxia Rongke held by and registered in the name of their spouse. In addition, each of them agreed to be bound by the contractualarrangements described here if the spouse obtains any equity interest in Ningxia Rongke for any reason. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 55 of 194 Table of Contents54On October 30, 2018, the spouse of each shareholder of Beijing Yiyi signed two Spouse Consent Letters, which contain terms substantially similarto the Spouse Consent Letters described above.Commitment Letters. Pursuant to the Commitment Letters dated December 17, 2018, the shareholders of Ningxia Rongke which restated andamended the version dated June 7, 2018, undertake that, when Ningxia Rongke exercises its options under the Exclusive Option Contracts, theywill refund, without any conditions, any amount and fees to Ningxia Yixin which exceed the share purchase price provided in the Exclusive OptionContracts.On October 30, 2018, each of the shareholders of Beijing Yiyi executed a Commitment Letter, which contain terms substantially similar to theCommitment Letters described above.Agreements that allow us to receive economic benefits from the VIEsAmended Equity Pledge Contracts. Pursuant to the Amended Equity Pledge Contract dated April 13, 2021 among Beijing Yixin (previouslyknown as Ningxia Yixin), Beijing Rongke (previously known as Ningxia Rongke) and each shareholder of Beijing Rongke, the shareholders ofBeijing Rongke have agreed to pledge 100% of the equity interests in Beijing Rongke for the benefit of Beijing Yixin. In the event of a breach byBeijing Rongke or its any shareholder of contractual obligations under the Amended Equity Pledge Contract, Beijing Yixin , as pledgee, will havethe right to dispose of the pledged 100% equity interests in Beijing Rongke and will have priority in receiving the proceeds from such disposal.The shareholders of Beijing Rongke also undertake that, without prior written consent of Beijing Yixin, they will not dispose of, create or allowany encumbrance on the pledged equity interests and rights. Beijing Rongke further undertakes that, there is no other pledge or any otherencumbrance on the assets owned by it that will or is likely to affect Beijing Yixin’s pledged equity interests and rights, including but not limited toany transfer of intellectual property rights or transfer of any asset with a value exceeding RMB0.5 million (except in the ordinary course ofbusiness). Beijing Rongke further undertakes that, without the prior written consent of Beijing Yixin, they will not assist or allow any encumbranceto be created on the pledged equity interests. The equity pledge under the Amended Equity Pledge Contract will not be effective until BeijingRongke and its shareholders complete relevant registration with appropriate government authorities.On October 30, 2018, Beijing Yixin, Beijing Yiyi and each shareholder of Beijing Yiyi entered into an Equity Pledge Contract, which containsterms substantially similar to the Amended Equity Pledge Contract described above.We completed the registration of the equity pledge of Beijing Yiyi on December 27, 2018 under the Equity Pledge Contract with the StateAdministration for Market Regulation in accordance with the PRC Property Rights Law. We are still in the process of registration of the equitypledge of Beijing Rongke.Exclusive Business Cooperation Agreements. Pursuant to the Exclusive Business Cooperation Agreement dated June 7, 2018 between NingxiaYixin and Ningxia Rongke, Ningxia Yixin has the exclusive right to provide Ningxia Rongke with the consulting and technical services required byNingxia Rongke’s business. Without Ningxia Yixin’s prior written consent, Ningxia Rongke may not accept any services subject to this ExclusiveBusiness Cooperation Agreement from any third party. Ningxia Rongke agrees to pay Ningxia Yixin an annual service fee at an amount of no lessthan 99% of its net profit or the amount which is adjusted at any time at the sole discretion of Ningxia Yixin. Ningxia Yixin has the exclusiveownership of all the intellectual property rights created as a result of the performance of the Exclusive Business Cooperation Agreement, to theextent permitted by applicable PRC laws. Ningxia Rongke also undertakes that upon the request of Ningxia Yixin, it will assist Ningxia Yixin inthe consummation of the assignment or transfer of the relevant intellectual property rights, including but not limited to entering into a transfer orlicense agreement at no or a nominal consideration as well as fulfilling the necessary registration. To guarantee Ningxia Rongke’s performance ofits obligations thereunder, its shareholders have pledged their equity interests in Ningxia Rongke to Ningxia Yixin pursuant to the Equity PledgeContract. The Exclusive Business Cooperation Agreement will remain effective for a term of ten years and unconditionally renewable at the solediscretion of Ningxia Yixin.On October 30, 2018, Beijing Yixin and Beijing Yiyi entered into an Exclusive Business Cooperation Agreement, which contains termssubstantially similar to the Exclusive Business Cooperation Agreement described above. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 56 of 194 Table of Contents55However, our PRC legal counsel has also advised us that there are substantial uncertainties regarding the interpretation and application of currentand future PRC laws, regulations and rules. Accordingly, the PRC regulatory authorities may take a view that is contrary to the opinion of our PRClegal counsel. It is uncertain whether any new PRC laws or regulations relating to variable interest entity structures will be adopted or if adopted,what they would provide. If we or any of our VIEs are found to be in violation of any existing or future PRC laws or regulations, or fail to obtain ormaintain any of the required permits or approvals, the relevant PRC regulatory authorities would have broad discretion to take action in dealingwith such violations or failures. See Item 3.D “Risk Factors—Risks Related to Our Corporate Structure.”Capital Expenditures and DivestituresFor a description, including the amount invested, of the Company’s principal capital expenditures (including interests in other companies) for theyears ended December 31, 2018, 2019 and 2020, see Item 5.B “Liquidity and Capital Resources—Capital Expenditures.”The Company did not make any material divestitures for the years ended December 31, 2018, 2019 and 2020.To date, the Company has not made any capital expenditures or divestitures in calendar year 2021 that were not in the ordinary course of business.More InformationThe SEC maintains an internet site that contains reports, proxy, and information statements, and other information regarding issuers that fileelectronically with the SEC at http://www.sec.gov. The Company’s SEC filings can be found there and on the Company’s website athttps://ir.itiger.com/financials/sec-filings.B. Business OverviewWe are a leading integrated financial technology platform providing cross-market, multi-product investment experience for investors around theworld. We primarily operate a one-stop digital brokerage platform, which serves as a gateway for retail and corporate clients. Underpinned by thebrokerage services, we have successfully expanded our product offerings to ESOP management, IPO distribution, and asset management andwealth management. These integrated product offerings are highly synergetic and have significantly increased the average revenue per user andcustomer lifetime value.We offer comprehensive brokerage services through our integrated single-account structure, which empowers users in trade execution, marginfinancing and securities lending across different global markets. We also provide value-added services, such as investor education, communityengagement and IR platform, all within a few taps or clicks through APP on smartphone, tablet and PC terminals. In addition, we offer ESOPmanagement services to soon-to-be listed and listed companies, which enable them and their employees to manage their equity incentive schemesin a convenient and simplified manner. Moreover, we serve such issuers whom we expect to have a greater chance of cross-selling our IPOdistribution services, while retaining such employees with equity incentive awards to trade and invest on our platform. As of December 31, 2020,we had worked with 124 corporate clients on ESOP management services. Furthermore, IPO distribution is also an integral part of ourcomprehensive services package and is a major focus for our future growth. It not only helps us strengthen our relationship with corporate clients,but also provides IPO subscription opportunities for our retail clients. In 2020, we participated in 28 U.S. IPOs, far exceeding any of ourcompetitors in terms of deal count. In further, we offer ESOP employees and other brokerage customers personalized asset management and wealthmanagement services at competitive prices, such as pre-IPO shares, overseas fund products or bonds, which then lead our users to allocate more oftheir wealth on our platform.We take pride in our proprietary and cutting-edge technology. Proprietary technology is the backbone of our continuous innovation. Our All-In-One experience adopted a comprehensive risk methodology enabling users to trade multi-asset classes across different markets in one integrated account. Our agile and scalable infrastructure enables us to enter new markets such as Singapore, Australia and other jurisdictions in a more efficient way. In addition, we distinguish ourselves in the market by moving up to the high-entry-barrier sector of self-clearing in the U.S with acquisition of Marsco in 2019. We have restructured and upgraded the clearing system of Marsco to achieve high business flexibility. In the fourth quarter of 2020, we have self-cleared over 20% of U.S. cash equity trades, far more than that of any other Chinese digital brokerage platforms in terms of volume cleared.  Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 57 of 194 Table of Contents56Our IPO underwriting business experienced significant growth in 2020. It is an integral part of our comprehensive services package and is a majorfocus for our future growth. In 2020, we participated in 28 U.S. IPOs (up from 18 in 2019), in 14 of which the Company’s wholly-ownedsubsidiary Tiger Brokers (NZ) Limited served as underwriter (up from 12 in 2019) and in 14 of which Tiger Brokers (NZ) Limited or US TigerSecurities, Inc., the Company’s another wholly-owned subsidiary, served as distributor (up from 6 in 2019), far exceeding any of our competitors interms of deal count. As we continue to accumulate investment banking transaction experience and strengthen our brand image, we expect to furtherincrease our exposure to larger, more complex transactions and our contribution to the underwriting syndicate, which may further improve ourresults of operations.We have achieved rapid growth in all business segments. While we primarily generate revenues by charging our customers commission fees fortrading of securities, we also earn interest income or financing service fees arising from or related to margin financing and securities borrowing andlending transactions provided by ourselves or third parties to our customers for trading activities, as well as other income from IPO distribution,and asset management and wealth management.We generate revenues primarily by charging our customers commission fees for trading of securities as well as earning interest income or financingservice fees arising from or related to margin financing and securities borrowing and lending transactions provided by ourselves or third parties toour customers for trading activities. Our revenues were US$33.6 million, US$58.7 million and US$138.5 million in 2018, 2019 and 2020,respectively. We recorded net losses of US$44.3 million and US$5.9 million in 2018 and 2019, respectively, and net income of US$19.2 million in2020. Our revenues in 2018, 2019 and 2020 were mainly generated in New Zealand, PRC and the U.S. Our New Zealand subsidiary hascontributed over 88.8% of total revenues for the year ended December 31, 2020.Our StrategiesHarnessing our comprehensive product offerings and proprietary cutting-edge technology, we are well positioned to meet the distinct needs ofglobal investors and capitalize on the structural advantages inherent in the broader macro trends: online migration, booming retail participation andrising private wealth, each of these secular trends bolsters the growth of online investing and our business.We intend to strengthen our competitive position and proactively grow our business by pursuing the following strategies:Expand internationally to serve investors around the worldWe plan to leverage our first-mover advantage to seize opportunities in the digital brokerage sector. Through our highly extensible and scalabletechnology platform, we intend to leverage our proven track record and experience of global expansion and deep local market insights to broadenour foothold and gain market share in selective markets. We will opportunistically evaluate and pursue licenses or acquisitions to enhance ourofferings and accelerate growth objectives in existing or new product verticals.Broaden and capitalize on our customer baseWe intend to acquire new customers and deepen our relationship with existing customers. We operate in a rapidly growing industry withtremendous upsizing potential, which presents significant opportunities for us to attract new customers. As we continue to make strides inexpanding into new geographies and verticals, we strive to enlarge our customer base through strengthening brand equity, word-of-mouth referrals,as well as a dynamic and effective marketing strategy.We grow with our customers as their investment needs evolve with adoption of more products and services on our platform. We intend to develop arobust long-term customer relationship which helps us deepen investor engagement and retention, and increase relationship balance overtime. Toachieve this, we will continue to invest in enhancing user experience and optimizing product offerings of our platform, and foster our onlineinvestor community with high-quality, differentiated contents.As we introduce our users to a wider investment world, we grow with them. We will continue to serve as a lifetime investment companion to ourusers through enhanced contents and tools, optimized platform features and incentive schemes that allow users to better trade, learn, practice,communicate, share and harvest with us. We have an expansive base of high-quality corporate clientele which are highly synergetic to a number ofour businesses such as brokerage and margin financing. To this end, we will continue to grow institutional client base through an array of holistic,differentiated corporate offerings across ESOP management, IPO distribution and other value-added services. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 58 of 194 Table of Contents57We will continue to foster the deep connection between our retail and corporate clients and leverage the powerful flywheel inherent in our businessmodel to accelerate growth and crystalize operating synergies. Through our comprehensive service matrix that educates and nurtures users on ourIR platform, and proactively initiates interactive events and campaigns for listed companies and investors, we will continue to bridgecommunication between our retail and corporate clients, and in turn enhance customer conversion and engagement overtime.Extend the breadth and depth of our offeringsOur business thrives on constant expansion and relentless innovation of products and services. We will solidify our position as the platform ofchoice for online investing to customers of all types throughout economic cycles.We intend to continue focusing on a comprehensive and diversified suite of offerings to encompass:●Cross-market, multi-product investment experiences and product capabilities, including local-market equities, fund products and neweconomy investment assets; and●Innovative investing tools that leverage our strong product know-how to offer fund selection and portfolio construction not only to ourcustomers, but also to our corporate clients to enable better services to their own clients.We intend to grow asset management and wealth management services through deepening relationships with product providers, while at the same time enhancing product innovation and portfolio construction capabilities, which allow us to offer more robust product matching and customization with greater transparency. In particular, we aim to further increase and diversify investment products available on our platform and to enhance our research and investment expertise to increase the competitiveness of our asset management and wealth management services. We also aim to provide asset management and wealth management services to a greater number of high net worth individuals as well as institutional and corporate customers. We will also continue to engage in product innovation and content enrichment through our strong and proven R&D capabilities.Strengthening investment in core infrastructure and technologyTo cement our technology leadership in the industry, we are committed to continuous investment in enhancing reliability, functionality, scalabilityand performance of our proprietary technology system. For example, we have adopted a hybrid cloud infrastructure around the world, which allowsus to retain flexibility while ensuring security, via a public cloud for conducting non-sensitive information and a private cloud for processing andstoring business-critical data. We will seek to partner with leading cloud service providers to maintain and enhance the agility of our technologyinfrastructure.We will continue to invest in core infrastructure to strengthen our front-to-back technology and support foray into new capabilities and markets. We aim to further improve user experience by modularizing our apps, which allows us to achieve high reusability and quality, while at the same time maintaining flexibility to tailor particular modules to fit the needs of our cross-cultural customers. We will continue to enhance our technology in order management, algo trade, risk control and market access. Following our strategic acquisition of Marsco in 2019, we have restructured and upgraded its clearing system to achieve high business flexibility, and will continue to invest in the development of our self-clearing capabilities in the US and other markets in the future.We will further develop AI, big data and algorithmic capabilities to optimize our value propositions and improve operating efficiency, including:●Continuous investment into our advanced data warehouse and user profiling systems to empower marketing intelligence, which allows usto optimize customer experience through more personalized product offerings and recommendations, and enhancing user engagement andretention via our persistent focus on precise client management, customer profiling and labelling;●Integrating artificial intelligence and quantitative modelling tools into our platform, therefore making our platform increasingly smart andagile when offering financial advisory and portfolio construction to our customers; and Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 59 of 194 Table of Contents58●Continuous cost optimization and improvement of operating efficiency through process automation.Our Core Products and ServicesBrokerage ServicesOverviewWe deliver a comprehensive and user-friendly online trading experience for investors through our platform that can be accessed through our APPor website. Our services became accessible on the website and through our flagship APP, Tiger Trade, in August 2015. Currently our tradingplatform enables our customers, who are primarily Chinese investors living in and outside of China, to execute trades in a secure, reliable and cost-efficient environment. Our trading platform also encompasses an abundance of complementary services that help our customers make informedinvestment decisions.Our platform allows investors to trade stocks, options, warrants and other financial instruments listed on the major stock exchanges around theworld, including but not limited to Nasdaq, New York Stock Exchange and Hong Kong Stock Exchange as well as A shares which are eligibleunder Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect programs. Our customers can also trade futures contracts,trade on margin and short sell on our trading platform.The aggregate trading volume amounted to US$65.4 billion during the fourth quarter of 2020. Below is the table of the operating data as of thedates or for the periods indicated.As of and for the Three Months Ended Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Dec 31,201820182018201820192019201920192020202020202020Number ofcustomeraccounts (inthousands) 265.4 321.1 456.4 502.4 534.0 576.9 606.7 649.0 743.3 833.9 975.6 1,104.1Number ofcustomers withdeposits (inthousands) 51.2 59.8 75.5 81.6 87.6 95.0 101.9 113.2 134.1 167.8 214.7 258.7Number oftradingcustomers (inthousands) 46.6 53.6 69.2 76.2 81.8 88.9 93.3 98.9 114.4 140.1 182.3 222.0Total accountbalance(1)(3)(inUS$millions) 2,183.6 2,033.5 2,576.4 2,357.0 3,057.0 3,557.1 3,789.2 5,051.6 5,493.9 8,283.1 10,915.7 15,956.9Tradingvolume(3) (inUS$millions) 28,302.6 21,395.3 32,628.3 36,895.2 27,862.8 24,370.0 25,760.8 21,799.6 44,109.9 46,755.7 62,810.7 65,449.4Daily averagetradingvolume(2)(3)(inUS$millions) 464.0 345.1 526.3 542.6 456.8 386.8 402.5 340.6 711.5 742.2 981.4 1,022.6Notes:(1) Represents the total balance of all customers’ deposits on our platform as of the respective date.(2) Calculated based on the average number of trading days during the period of the U.S. and Hong Kong exchanges. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 60 of 194 Table of Contents59(3) As of December 31, 2020, 187,247 of our customers had conducted at least one trading transaction on our platform in the preceding 12 months(4) Translated at a rate of most applicable market rate as of each period end for total account balance and average exchange rate of each quarter fortrading volume.Trading Platform InterfaceThe user interface of our trading platform compartmentalizes services into five major functions: markets, community, discover, trade and account.●Markets. The markets function is an information terminal that helps customers keep track of current and historical market data includingreal-time prices, historical prices, alerts, financial filings, company profiles and third-party analysis.●Community. The community function is where users can read and post opinions on markets and securities.●Discover. The discover function is a comprehensive suite of investor education tools including popular stock picks and short videos ontrading fundamentals that impart valuable trading knowledge to our customers.●Trade. The trade function enables customers to place trading orders and to execute orders over a safe and fast environment.●Account. The account management function allows users to review and revise their personal information, manage their funds andrewards, and communicate with customer representatives.Types of AccountsWhile we also partner with other clearing agents, we substantially rely on Interactive Brokers to execute, settle and clear a substantial portion of thetrades of the U.S. and Hong Kong stocks and other financial instruments, and to comply with certain federal, state and other laws, as discussed inmore details in Item 4.B “Business Overview—Our Core Products and Services—Revenue Models.” There are two types of accounts on ourplatform, consolidated accounts and fully disclosed accounts, depending on the cooperative model with our clearing agents.Under the consolidated accounts, our customers only open accounts and place trades with our platform. We are responsible for the “know yourclient”, or KYC, and anti-money laundering, or AML, procedures including customer identity verification, account approval and disapproval,record keeping, monitoring and supervision of the accounts and other compliance functions, which are no less stringent than the proceduresperformed for fully disclosed account customers. We work with Interactive Brokers primarily, as well as other agents and our subsidiary Marsco fororder execution, clearing and settlement services. Consolidated accounts offer more functions, products and services than fully disclosed accounts,such as innovative financial instruments. With our advanced technology and third party database, the account opening process for consolidatedaccounts is more efficient and smooth.Under the fully disclosed accounts, we provide a user-friendly trading interface and infrastructure for the customers and we engage InteractiveBrokers to perform the execution, clearing and settlement services. We are responsible for technical support, customer service and marketing to thefully disclosed account customers. We also perform our own KYC procedures to verify the identity and financial condition of potential customers.In addition to the account on our platform, each of our customers also open a corresponding account with Interactive Brokers. Interactive Brokersis required to perform key functions in respect of KYC and AML procedures including customer identities verification, account approval anddisapprovals and continuing monitoring and supervision of the accounts.Revenue ModelsWe currently derive a significant portion of our revenues from our brokerage services through commission fees we charge our customers andinterest income or financing service fees arising from or related to margin loans or securities borrowing and lending transactions services providedto customers by ourselves or third parties for trading activities. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 61 of 194 Table of Contents60Our revenues from commission fees are generated by customer trades and are largely determined by trading volume and commission rates. Wecharge commission fees based on the amount of transaction volume, or the number of shares, lots or contracts in each order. We from time to timeaward discounted or even zero commission fees to new or existing customers as part of our marketing scheme, thus attracting more customers andboosting customer stickiness.Pursuant to the agreement with our primary clearing agent, Interactive Brokers, we receive a portion of commission fees paid by our customersevery time Interactive Brokers executes and clears a trade order. For consolidated accounts, we receive commission and pay a pre-determinedportion to Interactive Brokers and other clearing partners as execution and clearing fees. In the meantime, we also use Marsco, one of oursubsidiaries with clearing license to execute and clear client trades and pay a pre-determined portion to corresponding clearing counterparties. Forfully disclosed accounts, every time Interactive Brokers executes and clears a trade, it collects the commission, deducts the execution and clearingfees and returns the rest of the commission fees to us.Customers can also trade on margin and short sell securities on our trading platform. The minimum deposit that customers must have to open andmaintain a margin account so as to conduct margin trading and securities borrowing and lending transactions is currently set at US$2,000. Themargin loan or funding is offered by our platform for consolidated account customers and by Interactive Brokers for fully disclosed accountcustomers. We generate interest income arising from margin financing offered by us to consolidated account customers and earn financing servicefees related to the margin financing provided by Interactive Brokers to our customers.We adopt diversified pricing terms to better serve our customers with individualized needs. The commissions we charge generally vary inaccordance with the type of products or services discussed above as well as timing of account activation, eligibility for discounts and other factors.For margin loans, we charge a specific interest rate on margin loans provided by us, or a mark up above the interest rate of the margin loansprovided by our clearing agents. Below is a brief summary of the currently effective pricing terms for certain of our products and services, whichare subject to change from time to time.Products and services Our pricing terms Other fees and expensesU.S. stocks on Nasdaq and NYSE(1) Commissions: US$0.0039 per share subject toa minimum charge of US$0.99 per transaction Applicable regulatory fees and transaction feescharged by the SEC and other third-partyinstitutions Technical service fees: US$0.004 per sharesubject to a minimum charge of US$1.00 pertransactionHong Kong stocks on HKEX(1) Commissions: 0.029% of trading volume Applicable transaction fees charged by HKEXand stamp tax charged by the Hong Kong SARgovernment Technical service fees: HK$15U.S. stock options Commissions: US$0.65 per contract subject toa minimum charge of US$1.99 per transaction Other fees primarily include options regulatoryfees charged by exchanges, transaction feescharged by the FINRA and clearing feescharged by the Options Clearing Corporation Technical service fees: US$0.3 per contractsubject to a minimum charge of US$0.99 pertransactionHong Kong stock optionsCommissions: 0.2% of trading volume,subject to a minimum charge of HK$3 pertransactionApplicable transaction fees charged by HKEXTechnical service fees: HK$15Financing loans Annualized interest rate for loans in USD tocustomers(3): from 3.250% to 4.070%depending on trading volume N/AAnnualized interest rate for loans in HKDto customers(3): from 4.000% to 5.000%depending on trading volume Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 62 of 194 Table of Contents61Notes:(1) Only apply to customers who opened accounts after June 3, 2019.(2) New customers from certain of our revenue-sharing model partners are not entitled to this pricing term.(3) Annualized interest rates effective since April 25, 2021. Interest rates are subject to change in accordance with market conditions.(4) Interest rates are subject to change in accordance with market conditions.Institutional and Corporate ServicesIn 2020, we continued to expand a number of innovative services in order to attract new customers as well as to serve existing customers whom weexpect to have a greater chance of cross-selling products or services. We provide ESOP management services to soon-to-be listed and listedcompanies which enable them and their employees to manage their equity incentive schemes in a convenient and simplified manner. Our customerrepresentatives work together with these companies to build a repository of equity incentive awards in our proprietary ESOP management system.We then help companies manage the vesting and exercise of their equity incentive awards as well as educating company employees about ESOP.Overall, we have worked with over 124 corporate clients by the end of the year of 2020, including 35 new clients added in the fourth quarter of2020.With our in-depth knowledge of the global financial market, we have also developed a one-stop incubation service for small and medium sizedbuy-side customers to set up offshore funds in a cost-effective way. Our service offerings include fund license application, product design, assetcustody, transaction execution and funding allocation. We carefully consider factors related to a fund’s potential launch to the public such asvehicle structure, registration constraints, demand and potential for success in comparison to other funds in the market. We generally offer our fundstructuring and management services on a complimentary basis in exchange of our institutional customers’ marketing of our products and services.Our IPO underwriting business experienced significant growth in 2020. It is an integral part of our comprehensive services package and is a majorfocus for our future growth. In 2020, we participated in 28 U.S. IPOs (up from 18 in 2019), in 14 of which the Company’s wholly-ownedsubsidiary Tiger Brokers (NZ) Limited served as underwriter (up from 12 in 2019) and in 14 of which Tiger Brokers (NZ) Limited or US TigerSecurities, Inc., the Company’s another wholly-owned subsidiary, served as distributor (up from 6 in 2019), far exceeding any of our competitors interms of deal count. As we continue to accumulate investment banking transaction experience and strengthen our brand image, we expect to furtherincrease our exposure to larger, more complex transactions and our contribution to the underwriting syndicate, which may further improve ourresults of operations.Furthermore, we provide investor relations service to issuers, to help companies manage their ongoing relationships with shareholders, includingcomprehensive stock data and corporate information via our investor-facing homepage, investor education, community events, video broadcastingand others.Margin Financing and Securities Lending ServicesOur margin financing and securities lending services provide real-time, cross-market securities-backed financing to our clients. We have grownthese services rapidly since introduction, a reflection, we believe, of both our ability to cross-sell as well as our clients’ receptivity to increasinglysophisticated investing tools delivered seamlessly.We currently offer margin financing to clients who trade securities listed on the Hong Kong Stock Exchange, Singapore Exchange and the majorstock exchanges in the U.S. as well as qualified securities under the Hong Kong, Shanghai and Shenzhen Stock Connect. All financing extended toour clients is secured by acceptable securities pledged to us. Our trading system can automatically pledge cross-market account assets so that thevalue in a client’s multiple trading accounts, which may include cash in different currencies and acceptable securities listed on these markets, willbe aggregated when calculating the value of the client’s collateral. In particular, this provides significant efficiencies as it eliminates the costs andprocedures involved in cross-market currency translation or exchange. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 63 of 194 Table of Contents62Our clients are eligible for margin financing services when they hold securities that are acceptable as pledges to us in their accounts. The credit linefor each eligible client is determined based on the securities across all of his or her trading accounts. The margin financing services for eligiblemargin financing clients are activated automatically, when the funds in their accounts are not sufficient to purchase the desired securities and thereis still sufficient balance in their credit lines.A list of securities acceptable as collateral to us and their respective margin ratios are regularly updated and shared with our clients. Our riskmanagement team determines the margin ratio for each of the acceptable securities based on the trading frequency, fundamentals, historical pricefluctuations and general market volatility. We also reference the financing terms of major financial institutions in establishing our margin ratios,and we typically find our margin ratios to be equal or higher. We believe this has differentiated our prudent risk controls. Our margin ratios aremonitored in real-time and our risk management team reviews and adjusts the margin ratio for each acceptable security on a regular basis and morefrequently in the case of a significant and rapid price decline.For clients who trade securities listed on the major stock exchanges in Hong Kong, Singapore and the U.S., we offer securities lending services bylending securities we obtain from our securities lending partner. This service allows our clients to pursue short-selling strategies. To borrowsecurities, our clients must pledge cash or acceptable securities from in-house trading accounts. When we launched our margin financing business,we financed mostly from our own working capital and retained earnings. We have diversified the source of our financing through collaborationwith our financial institution partners where we can combine collateral from our clients into portfolios and pledge the portfolios to financialinstitutions for commercial loans.Asset Management and Wealth Management ServicesAlthough our asset management and wealth management services are still at the ramping-up stage, we believe they are an integral part of ourcomprehensive services package and a major focus for future growth. Through our asset management and wealth management services, we providepersonalized services at competitive prices. Our customers can purchase products such as pre-IPO shares, overseas fund products or bonds. Wecharge a service fee for such transactions.Our first proprietary ETF product UP Fintech China-U.S. Internet Titans ETF was launched in November 2018 and closed in November 2020.In late 2019, the Company added another wealth management feature, “Cash Plus”, to its trading platform, Tiger Trade. This cash managementservice provides clients with high liquidity and steady interest, and allowing clients to enjoy appreciation on their idle cash. By integrating CashPlus into Tiger Trade’s platform, investors may manage their assets and build wealth with just a few clicks.We recently launched our “Fund Mall” where our clients may choose from nearly 100 funds and invest in new asset management products. FundMall lets investors create diversified portfolios tailored to their specific needs. The launch of the Fund Mall represented an important step forwardin the Company’s strategy to enrich its wealth management offerings. Investors may subscribe to and redeem a wide variety of mutual funds in theFund Mall with Tiger Trade’s all-in-one account, adding easy and instant diversification to their portfolios without having to open a separate, non-linked account.Complementary ServicesWe believe that a key attraction of our trading platform is the complementary services we embed in our trading platform’s functions. The majorcomplementary services are market information, community engagement, investor education and simulated trading, which work together to helpour customers make informed investment decisions.●Market information. We provide comprehensive market information to our customers, including real-time price quotes from variousexchanges and international markets, technical indicators and macroeconomic data. Our customers can either select market informationby browsing under the exchanges they are interested in researching or using the search function to find a specific security. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 64 of 194 Table of Contents63●Community engagement. We have built our “Tiger Community” consisting of live discussion boards for our customers to communicatewith our community team and among themselves regarding market trends, investment opportunities and other related topics. Discussionboards are broken down into hot topics that are tailored to major market events and editors’ picks representing substantive and analyticalposts that add value to the investor community.●Investor education. We have developed “Tiger Education,” which is a set of educational programs designed to target customers with avariety of experience levels trading in stocks and other financial instruments. Our educational programs include basic rules and processesof trading, fundamental analysis methods and technical analysis methods. We offer online lectures and live video programs produced in-house covering a variety of topics.●Simulated trading. We enable users who have signed up on our trading platform to practice their stock-picking and trading skills withoutactually investing any money. Users can log on, set up a paper account and use a predetermined amount of simulated funds to makesimulated investments.Our Users and CustomersWe classify those who have registered on our platform as our users and those who have opened accounts on our platform as customers. Ourcustomers include individual customers, corporate customers and institutional customers.We have attracted a young, affluent, and highly engaged user base with frequent trading pattern base on our trading platform. Our users andcustomers are generally sophisticated Chinese investors living in and outside China with relatively higher risk tolerance.As of December 31, 2020, the aggregate of account balance amounted to US$16.0 billion. Our customers can open and activate trading accountsthrough our APP which can be downloaded for free from APP stores or through our website. After filling in personal information online, ourcustomers are required to complete a series of questions and upload various documents to verify their identity and assess potential risks.We have experienced significant growth in both number of customers and trading volume due to our reliable and secure trading platform,comprehensive brokerage and value-added services and superior user experience. The total customer accounts increased from 18,697 as of March31, 2016 to 1,104,113 as of December 31, 2020, representing a compounded quarterly growth rate of 44.9%. The daily average trading volumeincreased from US$22.7 million during the first quarter of 2016 to US$1,022.6 million during the fourth quarter of 2020, representing acompounded quarterly growth rate of 41.4%.Marketing, Branding, Customer Development and Customer SupportWe attract and retain customers to use our trading platform through marketing and branding, customer development and customer support.Marketing and BrandingWe conduct targeted branding and marketing to attract potential customers using both online and traditional marketing channels. Our onlinemarketing activities mainly include Internet search engine results and advertisements on websites focused on trading and finance. We also activelyconduct marketing for our trading platform through APP stores. In addition, we promote our brand and trading platform through our corporateaccounts on popular interactive social media platform. We benefit from cross-branding arrangements with third-party websites, and influentialsocial media accounts, under which we cooperate to help improve each other’s brand recognition. We specialize in utilizing social media tostrengthen our brand equity, enhance our competitive advantages and expand our business.We regularly initiate branding activities to promote our brand awareness among existing and potential customers around the world. We provide thetechnical backbone to many leading online platforms that allow their own users to analyze and trade U.S. and Hong Kong securities. As a result ofthe superior functionalities of our trading platform and our position as an independent platform with capability to trade U.S. and Hong Kongsecurities, we have been chosen by some well-known platforms as their business partner. These partnerships have enabled us to access a wider userbase and scale up in a cost-efficient manner. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 65 of 194 Table of Contents64We focus on investing in cost-effective marketing initiatives and regularly evaluating the effectiveness of various marketing channels to optimizethe allocation of our marketing resources. All customer acquisitions are tracked and analyzed based on profitability on a regular basis so thatadjustments can quickly be made to our marketing efforts. We focus on continuously improving the quality of our products and services as webelieve satisfied customers are more likely to recommend our trading platform to other potential customers. We incurred marketing and brandingexpenses of US$10.5 million, US$7.1 million and US$15.9 million in 2018, 2019 and 2020, respectively, accounting for 31.4%, 12.1% and 11.5%,respectively, of total revenues for the same periods.Customer DevelopmentOur users and potential customers can initiate contact with us through phone call and online message. To further build the relationships, ourbusiness and customer support team generally follow up with customers to respond to their questions about our trading platform, our products andour business in general.We also use data analytics tools to identify users who are more likely to open trading accounts with us through an analysis of communicationhistory and platform usage records, thus improving the effectiveness of our customer development and customer conversion. We also implement amember-to-member referral bonus system for existing customers who introduce new customers to our trading platform so both the introducer andthe introduced receive bonus funds for commission-free trading.Customer SupportWe take pride in the level and quality of customer services we provide. We have a dedicated team of customer support personnel that handlescustomer inquiries about our trading platform via phone call and online message. Our business and customer support team consisted of162 employees as of December 31, 2020 and operates for around 20 hours every trading day to serve our customers across the world.We implement stringent internal policies and training programs regulating how our customer representatives communicate with and serve ourcustomers. Our compliance team also regularly monitors communications between our customer representatives and customers to maximize thelevel of satisfaction from our customers.Our Technology and InfrastructureOur proprietary technology is critical to our goal of providing the most user-friendly trading experience at the best value to our customers. Over thepast five years, we have developed an integrated trading platform to create an efficient conduit for the global flow of capital across securities onelectronic exchanges around the world, while at the same time maintaining one of the lowest fee schemes in the industry. We strongly believe indeveloping and continuing to enhance our proprietary technology to adapt quickly to the changing environment and regulatory change of ourindustry and to take advantage of opportunities presented by new exchanges or new product lines ahead of our competitors.Trading Platform InterfaceOur trading platform allows our customers to execute trades in an efficient, secure, reliable and user-friendly manner. Our user interface isspecifically designed to accommodate Chinese users’ specific behaviors and preferences. Customer trades are both automatically captured andreported in real time to our trading platform. Users can search for and download our trading platform on APP stores through their mobile devices,or simply trade on our website. It generally takes less than five minutes to register and submit the application required to open an account on ourplatform. Once our customers open accounts on our platform, they will be directed to link a payment method for making deposits into theiraccounts. We perform biweekly updates to our trading platform and had updated over 100 versions.Back-end SystemWe have a proprietary and robust back-end system, which is able to support major aspects of our business operation, and our comprehensiveproduct offerings. Our back-end system ensures the safety, stability, smoothness and speed of transactions on our trading platform. For example, wereceive, process and distribute stock quote data at a speed on average 71,200 units per second at its peak. Our back-end system is able to facilitatetrades in a secure and reliable manner by connecting seamlessly to our clearing agents. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 66 of 194 Table of Contents65Through our back-end system, we employ proprietary technology to automate functions including account management, market updates, orderrouting, seamless trading across securities and risk management. Our back-end system is built with the following features.●High availability. Our back-end system supports an infrastructure and application architecture with high-level SLA which guarantees thatour customers can connect and trade at any time to avoid missing any fleeting opportunities in the market.●High reliability. It provides high accuracy in user data and market data, supported by both real-time and off-line calculations.●Security. Our system empowers systemized security measures such as strong encryption and two-factor authentication, in addition todisaster recovery and business continuity plans.●High performance and extensibility. It is able to handle millions of real time data at the peak, while supporting order execution andsettlement with high throughput; enhanced to improve capacity for handling an increased load; and designed for easy modification,allowing us to increase system features, functions and capabilities efficiently.●Low latency. Our system boasts dedicated relay networks and system optimization tools that reduce end-to-end latency from customertrade orders to the various exchanges.Our proprietary back-end system boasts strong capabilities to handle customer information and trade orders. We designed our back-end system foreasy modification, allowing us to increase system features, functions and capabilities efficiently as well as to handle a high volume of orders fromcustomers at any one time. We ensure the security and integrity of all customer assets using various safeguards.We also maintain formal business continuity policies and practices aimed at ensuring rapid recovery from any business or trade interruptions. Werank each of our services according to the risks associated with potential interruptions and have also established business recovery time objectivesfor our services. We regularly review and test our recovery plans and controls to ensure the effectiveness of such plans and controls in meeting ourbusiness needs.CRM SystemOur CRM system is the core IT system for customer development and support. Our CRM system allows us to centrally monitor and supervisecustomer communications, manage relationships with customers, and analyze important customer data:●Customer communications. Our CRM system is integrated with our phone calls and online messaging systems, which assists customerrepresentatives to anticipate and solve questions for our customers as they can access customer information and data from the CRMsystem while communicating with customers.●Customer relationship management. Our CRM system also facilitates the management of account opening procedure, account statusupdate, collection of customer complaints and other customer activities. Through the CRM system, our customer representatives canaccess customers’ communication history, their platform usage records and trading records.●Customer analysis. Through our CRM system, we can analyze our customer’s communication history and trading records to enhance ouroperational efficiency.Research and DevelopmentWe develop our proprietary trading platform, back-end technology and CRM system internally and consider our expertise in the rapid developmentand deployment of new trading technology as one of our core strengths. We have a team of experienced engineers. The supervisors in charge of ourresearch and technology department all graduated from prestigious universities and worked at well-established Internet and software companiesbefore joining us. As of December 31, 2020, our research and development department consisted of 274 engineers and technicians. Substantially allof them have a bachelor’s degree or above. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 67 of 194 Table of Contents66Our company is technology-focused, and our management team is technology-savvy. Most members of the management team participate in writingdetailed program specifications for new applications. Our senior executives personally track progress on programming projects, which enables usto prioritize key initiatives and achieve rapid turn-around on new projects.Our current research and development efforts are focused on developing and improving, among other things, our trading capabilities, infrastructuretechnologies and customer data analysis technologies. To achieve optimal performance from our trading platform, we are regularly upgrading newversions, evaluating platform performance and performing quality assurance testing procedures.Risk ManagementOur business activities expose us to various risks. Identifying, measuring and managing risks are critical to minimizing damages to our business,operations and financial condition. Our compliance and legal departments work together with management to identify and manage all risks. Wehave implemented policies and procedures for identifying, measuring and managing risks, which include establishing threshold levels for our mostsignificant risks. Our business exposes us to four broad categories of risks: customer-related risks, trading-related risks, operational risks as well ascyber and information security risks. We are also subject to other risks that could affect our business, financial condition, operations or cash flowsin future periods. For additional information, please see Item 3.D “Risk Factors—Risks Related to Our Business and Industry—We may fail toupdate our risk management policies and procedures as needed and such policies and procedures may otherwise be ineffective, which may exposeus to unidentified or unexpected risks.”Customer-Related RisksWe interact with customers on a daily basis, exposing us to risks of customers conducting money laundering activities, fraud and other financialcrimes. We therefore implement rigorous KYC and AML measures to compile and periodically update customer profiles and to monitor activities.Once customers make deposits, we adopt the following safeguards to protect our customers’ assets:●Segregation of customer and internal funds. We segregate all customer funds from our internal funds in accounts with a few reputablebanks in New Zealand and the U.S. for consolidated accounts. We perform a detailed reconciliation of our customers’ funds on a regularbasis to ensure that such funds are properly segregated.●Regulatory compliance. We are currently authorized and accredited as a NZX investment advisory firm in New Zealand. Our subsidiary, Wealthn LLC, is a registered investment advisor and an NFA member as well as commodity pool operator and registered commodity trading advisor in the United States. Our subsidiaries, both US Tiger Securities, Inc. and Marsco Investment Corporation, are registered broker-dealers with the SEC and a member of FINRA and SIPC in the United States. Our Australian subsidiary, Fleming, holds an Australian financial services license. Our Hong Kong subsidiaries, Kastle Limited and Tung Chi Consulting Limited, are a licensed trust and company service provider and a licensed insurance broker respectively. For consolidated accounts, we carry out customer due diligence of our customers before establishing any relationship or conducting any transaction, pursuant to the anti-money laundering rules and regulations in New Zealand. See Item 3.D “Risk Factors—Risks Related to Our Business and Industry—We face risks related to our status as an anti-money laundering reporting entity in New Zealand and if the Financial Markets Authority finds fault with our AMLCFT programs and engages in enforcement actions against us, our business and reputation may be adversely affected.” We, as well as our clearing agents, conduct ongoing customer due diligence and account monitoring as well as other internal controls procedures to comply strictly with applicable rules in relevant jurisdictions. For fully disclosed accounts, our primary clearing agent Interactive Brokers takes the main responsibilities of verifying customers’ identities and other regulatory compliance in the United States.●Transfer of customer funds in real name. We generally require funds to be transferred in and out of customers’ own bank accounts inorder to reduce the risk of funds flowing into bank accounts of any unrelated third parties. This means that, with limited exceptions, acustomer’s trade account name must be the same as his or her bank account name to facilitate any fund transfer. Such measure not onlyreduces the risk of fraudulent transfer of customer funds into third-party accounts but also minimizes money laundering activities as wellas potential violation of foreign exchange regulations in China.●Tiger Verification. We developed a proprietary Tiger Verification APP in August 2018 that works together with our trading platform toincrease the security of customer accounts. Before customers complete transactions, they can enter their passwords and codes generatedfrom Tiger Verification to verify their transactions. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 68 of 194 Table of Contents67Trading-Related RisksWe are exposed to various trading-related risks arising from our brokerage operations, primarily market risk from financial market volatility andliquidity risk from inability to meet cash flow needs and regulatory requirements. Our management and risk management team work closelytogether to monitor our risk exposures throughout the day. We implement risk management measures for each of the major trading-related risksas follows:●Market risk. Market risk is the risk of loss incurred from adverse market movements. The primary market risk factor to which we areexposed is the fluctuation of trading volume. As a part of our risk management system, we plan to diversify our business to increase theproducts and services we offer under our asset management services as well as institutional and corporate services.●Liquidity risk. Liquidity risk is the risk of losses resulting from the inability to meet current and future cash flow needs. We are requiredto comply with the NZX’s capital adequacy requirements, by which our financial health is measured by assessing our liquidity against therisks we are exposed to. At all times our New Zealand subsidiary, Tiger Brokers (NZ) Limited, must maintain the net tangible currentassets, or the NTCA, at a level equal to, or greater than, the prescribed minimum capital adequacy, or the PMCA, which shall be thehigher of: (a) the minimum NTCA of NZ$0.5 million or (b) the total risk requirement, or the TRR. At the end of each business day wecalculate and record (a) the NTCA; (b) the TRR; and (c) the surplus and ratio that the NTCA over the PMCA. US Tiger Securities, Inc.and Marsco Investment Corporation must comply with the SEC’s net capital requirements, by which its current financial health ismeasured by assessing its liquidity against the risks where it has exposure. At all times US Tiger Securities, Inc. and Marsco InvestmentCorporation must maintain the net capital requirements, at a level equal to, or greater than, the prescribed minimum capital. US TigerSecurities, Inc. and Marsco Investment Corporation must maintain a minimum net capital requirement in compliance with the SEC Rule15c3-1 as well as comply with the SEC Rule 17a-11 and the “early warning levels” for net capital requirements contained therein. TigerBrokers (Singapore) Pte Ltd (“Tiger Brokers SG”) is a capital markets services license holder under the Securities and Futures Act,Chapter 289 of Singapore (the "SFA") for (I) dealing in capital markets products that are securities, collective investment schemes, andexchange-traded derivatives contracts; (II) product financing; and (III) providing custodial services, and an exempt financial adviserunder the Financial Advisers Act, Chapter 110 of Singapore (the FAA) for advising on investment products and issuing or promulgatinganalyses/reports on investment products that are securities, collective investment schemes, and exchange-traded derivatives contracts. It isalso currently in the process of applying for a licence under the Payment Services Act 2019, has not commenced any business in any"payment services" as defined under that Act. It is subject to regulation by the Monetary Authority of Singapore (“MAS”). Under theSFA, there is a requirement to maintain sufficient capital (“CAR”) as part of its condition to operate the business in Singapore. CAR iscalculated using a risk-based capital approach. For Tiger Brokers SG, the minimum base capital requirement is SGD 1 million and, inaddition, the firm is required to analyze its operational risk and determine further capital requirement according to the risk the businessfaces. Its financial resources (which definition includes its base capital) cannot fall below its total risk requirement (i.e. the amountrequired to address risks arising from its activities), and in the case that its financial resources fall below 120% of its total riskrequirement, it is required to immediately notify the MAS of this fact.●Credit risk. The main credit risk is the risk exposure related to the margin financing we extend to our clients. Margin financing isgenerally secured by securities in the customers’ accounts, but associated credit risk can be heightened during periods of market volatility,low market liquidity and over-concentration of certain securities. During such times, customers who utilize margin financing and whohave collateralized their obligations with securities may find their securities portfolio rapidly depreciating in value and may not besufficient to cover their credit obligations even after fully liquidating their portfolio. We are also exposed to credit risk when ourcustomers execute transactions, such as securities borrowing and lending that can also expose them to risk beyond their invested capital.We have a comprehensive policy implemented to assess and monitor the suitability of investors to engage in the trading activities that weoffer. Our credit exposure is to a great extent mitigated by our policy of credit assessment and automatic evaluation of each accountthroughout the trading day and closing out positions automatically or disabling further trading for accounts that are found to be under-margined. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 69 of 194 Table of Contents68Operational RisksOperational risk is the risk of loss resulting from inadequate or failed internal processes or controls, human errors or misconducts, system andtechnology problems or from external events. It also involves non-compliance with regulatory and legal requirements. We manage operational risksby establishing policies and procedures to accomplish timely and efficient processing and obtaining periodic reports from management regardingkey processes.Significant operational risks arise particularly in relation to trading, IT and finance functions. The potential risks relating to trading include routingerrors, booking errors, product administration errors and exposure limit breaches.We have implemented a comprehensive policy in compliance with the regulatory and legal requirements to assess and monitor the suitability oftrading activities on our platform. To mitigate the operational risk, we monitor, detect and predict abnormal trading activities that can potentiallyimpair the continuity of the operations of the market, our counterparts and our own firm. We have developed a business continuity plan to manageand minimize the impact to the business in the event of operational disruptions. Backups and procedures are in place to facilitate the recovery ofthese systems at our recovery site overseas. See Item 4.B “Business Overview—Our Technology and Infrastructure—Back-end System” for moreinformation.We have additionally formulated a series of internal procedures focused on minimizing operational risks. Our compliance department reviews andapproves materials published for investor education, market information and community engagement to prevent the disclosure of any inaccurateinformation. We also monitor the interactions between our customer representatives and customers for any non-compliance with internal policiesand regulatory rules. All customer-facing employees receive compliance training upon joining us and we also provide ad hoc compliance trainingson various compliance matters to all employees. An annual training schedule stipulates our training requirements. The compliance team monitorcustomer interactions to ensure that company policy is observed. We take pride in the level and quality of customer services we provide. We have adedicated team of customer service personnel that handles customer inquiries about our trading platform via phone call and online message.Cyber and Information Security RisksWe are exposed to malicious technological attacks intended to impact the confidentiality, availability or integrity of our systems and data, includingsensitive customer data. Our technology team relies on a layered system of preventive and detective technologies, practices and policies to detect,mitigate and neutralize cyber security threats. Secure access to our customers’ information and other confidential information is paramount to ourbusiness success. We therefore maintain strict internal practices, procedures and controls enabling us to better protect our customers’ personalinformation, such as providing different levels of access rights. We use hardware security machines to encrypt sensitive customer information inour CRM system. Access to our information system is granted to employees on an as-needed basis. We deploy advanced firewall technologies torestrict inappropriate access to our hosting facilities. We frequently monitor our APP, websites and critical servers for any cyberattacks ordata breaches. See Item 3.D “Risk Factors—Risks Related to Our Business and Industry—We may fail to protect our platform from cyber-attacks,which may adversely affect our reputation, customer base and business” and “—If we fail to protect customer data and privacy, our reputation,financial condition and results of operations will be materially and adversely affected.”Intellectual PropertyWe rely on a combination of trademark, copyright and trade secret protection laws in China and other jurisdictions, as well as confidentialityprocedures and contractual provisions to protect our intellectual properties and our brand. Our intellectual property rights are important to us indistinguishing our brand and services from those of our competitors and contribute to our ability to compete in our target markets. As our brandname gains more recognition among the general public, we will work to increase, maintain and enforce our trademark portfolio as well as softwareand domain name registrations, the protection of which is important to our reputation and the continued growth of our business. Below is acomprehensive summary of our intellectual property rights.As of March 31, 2021, we had obtained 10 design patents and had submitted 31 additional patent applications in China. As of March 31, 2021, wehad registered over 200 trademarks and had about 40 additional trademark applications in China. We had also obtained trademarks in jurisdictionssuch as Hong Kong, Singapore, Malaysia, EU, Indonesia, India, Philippines, Thailand, Australia and New Zealand, and submitted trademarkapplications in various jurisdictions. As of March 31, 2021, we had registered about 60 software copyrights and 5 artwork copyrights in China. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 70 of 194 Table of Contents69CompetitionThe online brokerage market is highly competitive and rapidly evolving. Our primary competitors include online brokers and other firms providingonline brokerage services. Nevertheless, we believe that our diverse product offerings, advanced technology infrastructure, efficient tradeexecution, top quality customer services and competitive pricing together make us one of the top performers in this market.Although some of our competitors may have greater financial resources or a larger customer base than we do, we believe that our proprietarytrading platform, comprehensive customer services, innovative products and services, unparalleled user experience, robust infrastructure andadvanced technology, and strong brand recognition are powerful competitive strengths in the fast-evolving online brokerage market.InsuranceOur New Zealand operating entity, Tiger Brokers (NZ) Limited, has in place professional indemnity insurance and directors’ and officers’ liabilityinsurance, each of which has a limit of indemnity of NZ$3 million and NZ$1 million respectively and covers worldwide (excluding the U.S. andCanada) jurisdictions and territories.Save as the insurance described above, in line with general market practice, we do not maintain any business interruption insurance or productliability insurance, nor do we maintain key-man life insurance. We additionally do not maintain any liability insurance or property insurancepolicies covering students, equipment and facilities for injuries, death or losses due to fire, earthquake, flood or any other disaster. Our Directorsconsider that our company currently maintains adequate insurance policies. See Item 3.D “Risk Factors—Risks Related to Our Business andIndustry—Our insurance coverage may be inadequate to cover risks related to our business and operation.”Legal ProceedingsAs the date of this report, we are not a party to, and we are not aware of any threat of, any legal proceeding that, in the opinion of our management,is likely to have a material adverse effect on our business, financial condition or operations, nor have we experienced any incident of non-compliance which, in the opinion of our directors, is likely to materially and adversely affect our business, financial condition or operations.ComplianceWe believe that our comprehensive compliance framework covering marketing compliance, regulatory compliance and AML procedures protectsthe assets and interests of our customers. Our compliance department carries out routine day-to-day compliance tasks and transaction reporting,business monitoring and customer due diligence to ensure compliance with all applicable laws and regulations. In addition, they monitorcomplaints and compile responses to these complaints.The compliance department also oversees general compliance with all applicable KYC rules and AML procedures, carries out the compliancepolicies and prepares reports to any regulatory agencies if needed. Lastly, all compliance employees are required to undergo continuous intensiveon-the-job training to become familiar with the latest regulatory environment developments.SeasonalityWe have not experienced seasonality in our business. However, as our brokerage business only began operations in 2015, volatility that may beinherent in the online brokerage industry could be masked by our rapid growth.RegulationThis section summarizes the principal New Zealand, U.S., PRC, Singapore, Australia and Hong Kong laws and regulations relevant to our businessand operations. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 71 of 194 Table of Contents70New Zealand Regulations Relating to Securities and Futures Brokerage BusinessOperational Rules of the Exchanges on Which We OperateTop Capital Partners, which changed its name to Tiger Brokers (NZ) Limited in June 2019, was accredited as a participant firm of the New ZealandStock Exchange, or NZX on January 18, 2017. Tiger Brokers (NZ) Limited is required to comply with the operational rules of the NZX to engagein online trading services business. The NZX’s markets are operated under a “self-regulating organization” model, or the SRO model. This meansthat the NZX is both an operator and regulator of markets. As an SRO, the NZX has key regulatory functions in respect of the operation of theNZX’s markets. It regulates market conduct, makes market rules and policies and works with the FMA as a co-regulator under the FinancialMarkets Conduct Act 2013(FMCA) in relation to continuous disclosure, market manipulation and insider trading. NZX’s regulatory functions areperformed by NZX Regulation Limited (NZ RegCo), a separate, independently governed entity. All regulatory decision-making has been delegatedby NZX to the NZ RegCo Board and NZ RegCo management.The operational rules of the NZX are published in the NZX Participant Rules, or the Rules. Upon designating a company, firm, organization orpartnership as a “Market Participant” as defined below, the Rules form a binding contract between that Market Participant and the NZX. The term“Market Participant” means a participant in the securities markets provided by the NZX who has been accredited and approved by the NZX. AnNZX advising firm means a Market Participant that has been authorized and accredited by the NZX as a NZX advising firm for the purpose ofproviding investment advice and/or investment recommendations, with respect to transactions in the NZX listed products. Tiger Brokers (NZ)Limited has been designated a Market Participant and a NZX Advising Firm under the Rules. As described further below, those designations weresuspended on July 1, 2020 and remain suspended.To comply with the Rules, Tiger Brokers (NZ) Limited has appointed an individual to be its managing principal. The managing principal must bean individual who has been designated and approved by the NZX. The managing principal is responsible for ensuring that Tiger Brokers (NZ)Limited complies on an ongoing basis with all applicable Rules, any directions issued from time to time by the NZX and that the business observesthe good broking practice defined in the Rules.Pursuant to the Rules, Tiger Brokers (NZ) Limited is also required to appoint a compliance manager, who is accountable to the managing principalfor overseeing the effective control of the firm’s broking business, ensuring compliance with the Rules and reporting all breaches and suspectedbreaches of the Rules.Rule 5.11.1 requires that Tiger Brokers (NZ) Limited, as an NZX Advising Firm, has in place a trading agreement with a Trading Participant,through which Tiger Brokers (NZ) Limited is able to execute on-market client orders in securities quoted on the NZX Main Board and DebtMarket. Since 1 April 2020, Tiger Brokers (NZ) Limited has not had in place a trading agreement as required by the Rules and has been unable toexecute client orders on NZX’s markets. Consequently, July 1, 2020, NZX Regulation announced that it exercised its powers under NZXParticipant Rule 21.10 to suspend the accreditation of Tiger Brokers (NZ) Limited as an NZX Advising Firm, until further notice. Tiger Brokers(NZ) Limited remains subject to all of its obligations under the Rules during the period of suspension, including in relation to its capital adequacyand client asset obligations. This suspension does not affect the ability of Tiger Brokers (NZ) Limited to accept client deposits and execute orderson offshore markets. NZ RegCo has required Tiger Brokers (NZ) Limited to apply by May 5, 2021 to have its suspension lifted, and has stated itwill commence a process seeking to revoke Tiger Brokers (NZ) Limited's status as a NZX Advising Firm and Market Participant if Tiger Brokers(NZ) Limited does not meet the application criteria.Membership AdministrationApplications for approval and accreditation as a Market Participant proceed by way of the submission of a completed application formaccompanied by mandatory supporting documentation including, among others, the applicant’s organizational documents, business plan, auditedaccounts, compliance manuals and procedures, technology information for its broking business and the back office system and payment andaccounting system.Once the NZX is satisfied that the application is in order and that the applicant is suitable to be accredited as an authorized Market Participant, thefirm is issued with a certificate acknowledging the applicant as a NZX Advising Firm under the Rules. The applicant is thereafter contractuallyobliged to observe compliance with the Rules and to report any instances of breach of the Rules to the NZX within prescribed time limits. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 72 of 194 Table of Contents71Under the Rules, the NZX can inspect information relating to a Market Participant’s business, including requesting that employees appear beforethe NZX to provide information. The NZX performs regular on-site and desk-based inspections to check that obligations under the Rules are beingmet. The inspection process is also designed to test a Market Participant’s procedures in light of best practice.If the NZX considers that adverse market conduct warrants investigation, it will refer that matter to Participant Compliance and/or the FinancialMarkets Authority for investigation. Suspected breaches are actively investigated and may lead to action in accordance with the NZX policy onregulation enforcement. A variety of enforcement tools exist, depending on the circumstances and the regulatory outcomes sought. For example:●Referral to the NZMDT: The NZ RegCo may refer the matter to the New Zealand Markets Disciplinary Tribunal, or the NZMDT. Thistool is available to NZ RegCo in relation to all the alleged NZX market rule breaches. Referrals to the NZMDT are likely to be made forbreaches of the NZX’s enforcement priorities or if it is necessary to get additional guidance from the NZMDT in relation to theinterpretation of a market rule.●Issue Infringement Notices: The NZ RegCo may issue infringement notices to issuers and participants. Infringement fees cannot exceedNZ$10,000.●Directions letter: The NZ RegCo may issue a “directions” letter noting the breach and requiring the issuer or participant to do specified things to comply with the Rules.●Impose additional requirements: TheNZ RegCo may impose additional requirements on a participant or issuer. This tool is likely to beused where the NZX Regulation considers it would assist the participant or issuer to comply with the market rules or to address aparticular risk to investors or customers.●Participant suspension/revocation: The NZ RegCo may suspend or revoke a firm’s designation as a Market Participant. This tool is morelikely to be used for very serious breaches, repeated breaches, or if it is in the best interests of the market to take such action.●Referral to the FMA: TheNZ RegCo may refer the matter to the FMA for investigation, if the matter is also one where the FMA hasjurisdiction to enforce a party’s obligations.Rules for TradingThe key principles that the NZX considers underpin Market Participants’ role in trading conduct are: (i) conflicts of interests must be appropriatelymanaged; (ii) Market Participants should always place the interests of their customers before their own interests; (iii) markets should be fair,orderly and transparent; (iv) Market Participants should have systems and controls in place in order to meet their requirements under the NZX’sRules and legislation; and (v) Market Participants should follow the good broking practices.Market Participants must conduct and report trading and dealing in all securities on the markets provided by the NZX in accordance with the goodbroking practice. Each Market Participant must take such action as may be required by the good broking practice to protect the rights of customers,whether purchasing or selling securities, in respect of entitlements to dividends, interest, or capital distributions and in regard to settlement.Each Market Participant must ensure the conduct of an orderly market. In particular each Market Participant must keep and maintain records of thetime and date of receipt of each order as part of the accounting records required by the Rules, be solely responsible for the accuracy of ordersentered/submitted to ensure the efficiency and integrity of the markets provided by the NZX. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 73 of 194 Table of Contents72The NZX requires that Market Participants have policies and procedures in place for detecting and reporting all instances of suspected insidertrading. NZX refers trading that may be indicative of insider trading to the FMA, the regulator responsible for enforcing the insider tradingprohibitions in legislation. The Market Participants must also have policies and procedures in place that detect and deter market manipulation.Manipulative conduct can either directly influence the price or appearance of trading in a financial product through the transactions undertaken, orindirectly influence the price of another asset or investment. The NZX prescribes a series of considerations which should be taken into accountwhen evaluating whether market manipulation has occurred or is being attempted. The NZX places restrictions upon employee share trading andrequires that all employees and their immediate family and close associates, referred to the in Rules as “prescribed persons,” must obtain writtenauthority before an order is placed by or on their behalf. Each employee and prescribed person is required to hold all Securities purchased orallotted for a minimum period of 10 business days, or the holding period, from and including the date of purchase or allotment.Each Market Participant must maintain an appropriate audit trail for all orders. This should include order/deal tickets, written order confirmations,copies of electronic instructions such as e-mail and the electronic order record on the order entry system. In each case this audit trail is to includethe information stated in the Rules.Each Market Participant must have adequate arrangements for the management of conflicts of interest that may arise in relation to its business andmust have written conflict management procedures in place to identify and manage any conflicts of interest which may arise between the MarketParticipant, its employees, directors and/or any customer. These procedures must provide that conflicts of interest between the Market Participant,its employees, independent directors, close associates of these people, or the Prescribed Persons, and/or any customer of the Market Participant are,where legally permitted, disclosed to any person to whom the Market Participant provides investment advice and/or investment recommendationsin a way that ensures the person is treated fairly. The NZX may request to see the written conflict management procedures of a Market Participantand evidence of compliance with these requirements, including, but not limited to, the analysis of whether a conflict exists and the nature ofdisclosures made where a conflict does exist.Rules for Risk ControlThe NZX rules require that customer assets must not be placed at risk from the Market Participant’s own business activities and all steps must betaken necessary to properly protect assets held on behalf of a customer and ensure that these are separately identified from the Market Participant’sown assets.Market Participants must regularly calculate, monitor and report liquidity and financial position on a risk adjusted basis. The Rules stipulate therequirements for the regular reporting of the structure and performance of Market Participants. The Rules also set out the requirements to complywith the NZX’s risk reducing procedures for handling settlement of transactions and requirements to prevent Market Participants who handlecustomer assets from exposing these to other risks within the Market Participant.A Market Participant must calculate its net tangible current assets, total risk requirement and the percentage that the net tangible current assets overthe prescribed minimum capital adequacy, as at the end of each business day with such calculation to be completed and recorded by the end of thenext business day, and provide to the NZX a monthly report of its daily capital adequacy calculations during that month.Each Market Participant must take out and maintain, at all times, insurance of a kind and for an amount reasonably determined to be appropriatehaving regard to the broking business and operations carried out by that Market Participant and the risks associated with that Market Participant’sbroking business, including those risks associated with employees.Client money or property servicesTiger Brokers (NZ) Limited provides “client money or property services” in New Zealand, which are regulated by the Financial Markets ConductAct 2013 (as amended in March 2021 by the Financial Services Legislation Amendment Act 2019) (“FMCA”).A client money or property service is:a)the receipt of client money or client property by a person and the holding, payment, or transfer of that client money or client property; and Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 74 of 194 Table of Contents73b)includes a custodial service (ie, the holding of client money or client property by a person (A) in trust for, or on behalf of, a client (C), oranother person nominated by C, under an agreement between A and C or between A and another person with whom C has an agreement(whether or not there are also other parties to the agreement)).Subpart 5B of Part 6 of the FMCA regulates client money or property services by imposing:◾disclosure obligations for services for retail clients;◾conduct obligations; and◾obligations for handling client money and client property.Certain of these obligations are summarized below.Disclosure obligations for services offered to retail clientsA provider of a regulated client money or property service must disclose prescribed information to a retail client:◾before receiving client money or client property from or on behalf of the client; or◾if not practicable before, as soon as practicable after receiving client money or client property from or on behalf of the client.A person must not provide information under the above requirement if:◾there is:◾a statement in the information that is false or misleading or is likely to mislead; or◾an omission from the information that is required by the regulations; and◾the statement or omission is materially adverse from the point of view of a client.Information about a future matter (including the doing, or not doing, of an act) is misleading if the person making the statement does not havereasonable grounds for making it.Conduct obligationsA provider must, when providing a regulated client money or property service, exercise the care, diligence, and skill that a prudent person engagedin the business of providing the service would exercise in the same circumstances.Obligations for handling client money and client propertyA provider who receives client money or client property, as part of a client money or property service, must:◾hold the client money or client property, or ensure the client money or client property is held, on trust for the client; and◾ensure that the client money is paid promptly into a bank in New Zealand (or into any other prescribed entity) to a designated trustaccount.A provider who receives or holds client money on trust for a client must keep, or ensure that there are kept, trust account records that discloseclearly the position of the client money in the trust account.A provider must not use or apply client money or client property received or held on trust for a client by a provider in any way except as expresslydirected by the client or by transferring it to the provider's designated trust account.The client money or client property that is received or held by a provider on trust for a client:◾is not available for the payment of the debts owing to any other creditor of the provider; and◾is not liable to be attached or taken in execution under the order or process of any court at the instance of another creditor of the provider. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 75 of 194 Table of Contents74RulesIn conjunction with the FMCA, the Rules also regulate client money or property service providers who have been accredited as MarketParticipants. The Rules require that each Market Participant must have in place appropriate management and supervision arrangements to ensurethat it conducts its broking business in accordance with the Rules and “Good Broking Practice” (as defined in the Rules).Registration of Financial Service ProvidersOur major operating entity, Tiger Brokers (NZ) Limited, is a financial service provider registered on the Financial Services Providers Registerestablished under the Financial Service Providers (Registration and Dispute Resolution) Act 2008.Financial service providers are required to be members of an approved dispute resolution scheme if they provide financial services to retail customers. Tiger Brokers (NZ) Limited is registered with the Financial Dispute Resolution Service. A customer is entitled to raise a complaint directly with Financial Dispute Resolution Service. If this occurs, Financial Dispute Resolution Service will work with the customer and Tiger Brokers (NZ) Limited with the aim to reach agreement on any complaints regarding the provision of a financial service. If an agreement cannot be achieved, Financial Dispute Resolution Service will make a decision on the complaint which is binding on Tiger Brokers (NZ) Limited. The services provided by the Financial Dispute Resolution Service are free of charge for customers. Rules Relating to Anti-Money Laundering and Countering Financing of TerrorismTiger Brokers (NZ) Limited is regulated by the FMA for AML/CFT purposes and recorded on the FMA website as an AML/CFT reporting entity.The AML/CFT Act places obligations upon New Zealand’s reporting entities, including financial institutions to detect and deter money launderingand terrorist financing.A reporting entity must establish, implement, and maintain an AML/CFT compliance programme that includes internal procedures, policies, andcontrols to detect money laundering and the financing of terrorism and to manage and mitigate the risk of money laundering and financing ofterrorism. Before conducting customer due diligence (i.e., the KYC procedures) or establishing an AML/CFT programme, a reporting entity mustfirst undertake a written risk assessment regarding the risks of money laundering and financing of terrorism that it may reasonably expect to face inthe course of its business.A civil liability act occurs when a reporting entity fails to comply with any of the AML/CFT Act requirements. The FMA has a variety of remediesfor civil liability acts including formal warnings, enforceable undertakings, and, on application to the court, injunctions and pecuniary penalties. Areporting entity that engages in conduct constituting a civil liability act commits a criminal offence if the reporting entity engages in that conductknowingly or recklessly. Further criminal offences are contained in the AML/CFT Act. A reporting entity or person who commits an offence underthe AML/CFT Act is liable on conviction to, in the case of an individual, either or both of a term of imprisonment of not more than two years and afine of up to NZ$0.3 million, and in the case of a body corporate, a fine of up to NZ$5 million.The AML/CFT Act also requires reporting entities to conduct the customer due diligence on upon a customer, any beneficial owner of a customerand any person acting on behalf of a customer.A reporting entity must obtain the prescribed identity information in relation to the relevant persons and take reasonable steps to satisfy itself thatthe information obtained is correct and, according to the level of risk involved, take reasonable steps to verify any beneficial owner’s identity sothat the reporting entity is satisfied that it knows who the beneficial owner is. A reporting entity must also obtain information on the nature andpurpose of the proposed business relationship between the customer and the reporting entity and sufficient information to determine whether thecustomer should be subject to enhanced customer due diligence. Enhanced customer due diligence is required in a number of prescribedcircumstances and involves obtaining and verifying additional information, including in relation to source of funds or wealth. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 76 of 194 Table of Contents75A reporting entity must, as soon as practicable after establishing a business relationship or conducting an occasional transaction or activity, takereasonable steps to determine whether the customer or any beneficial owner is a politically exposed person. If a reporting entity determines that acustomer or beneficial owner with whom it has established a business relationship is a politically exposed person, then the reporting entity musthave senior management approval for continuing the business relationship and must obtain information about the source of wealth or funds of thecustomer or beneficial owner and take reasonable steps to verify the source of that wealth or those funds.When a reporting entity suspects that an activity undertaken by a customer may be relevant to the investigation or prosecution of an offence, or theenforcement of certain legislation, as soon as practicable but no later than 3 working days after forming its suspicion, that activity must be reportedto the Commissioner of Police of New Zealand.On April 6, 2020, the FMA publicly issued a formal warning to Tiger Brokers (NZ) Limited which stated that it had reasonable grounds to believethat Tiger Brokers (NZ) Limited had engaged in conduct constituting a civil liability act under the AML/CFT Act. The formal warning stated thatits issuance did not affect the FMA's ability to consider or impose other appropriate sanctions under the AML/CFT Act. On March 20, 2020, priorto publishing the formal warning, the FMA notified Tiger Brokers (NZ) Limited that it had opened an investigation into Tiger Brokers (NZ)Limited's AML/CFT Act compliance, which is ongoing. The FMA's formal warning required Tiger Brokers (NZ) Limited to carry out remedialactions in relation to its AML/CFT Act compliance, which were completed in time by September 30, 2020.New Zealand Regulations on Internet PrivacyThe Privacy Act 2020 controls how “agencies” collect, use, disclose, store and give access to “personal information”. An “agency” is widelydefined and includes any individual, public or private sector agency, or court or tribunal that is carrying on business or present in New Zealand,with specified exceptions. ‘Personal information’ means information about an identifiable individual. The Privacy Act covers government agencies,local councils, businesses, and individuals. All personal information is covered, including information about employees. All organizations arerequired to have a privacy officer to deal with privacy issues.The Privacy Act now clearly states that it has extraterritorial effect. This means that an overseas business or organization that is ‘carrying onbusiness’ in New Zealand will be subject to the Act’s privacy obligations, even if it does not have a physical presence here.The Privacy Act provides for 13 overriding privacy principles. The 13 principles stipulate how information can be collected, used, disclosed andstored, and people’s rights to gain access to that information and ask for it to be corrected. The privacy principles cover: collection of personalinformation (principles 1-4); storage and security of personal information (principle 5); requests for access to and correction of personalinformation (principles 6 and 7, plus parts 4 and 5 of the Act); accuracy of personal information (principle 8); retention of personal information(principle 9); use and disclosure of personal information (principles 10 and 11); disclosure of personal information outside New Zealand (principle12) and, using unique identifiers (principle 13)When an individual feels there has been a breach of the principles he or she can lodge a complaint with the Privacy Commissioner. The PrivacyCommissioner investigates the complaint and undertakes a process of conciliation rather than punishment. If the complaint cannot be settled, it maybe referred to the Human Rights Review Tribunal, which considers the situation anew. If the Tribunal finds there has been a breach, it may award arange of remedies including damages and restraining orders.The Privacy Act introduces a mandatory privacy breach notification regime for “notifiable privacy breaches”. Notifiable privacy breaches are those that a business or organization believes has caused (or is likely to cause) serious harm. Notifiable privacy breaches require a business or organization to notify the Office of the Privacy Commissioner and affected individuals as soon as possible (unless an exception applies for notifying individuals, for example where it reveals a trade secret or would endanger personal safety). Under the Act, it is an offence to fail to inform the Privacy Commissioner when there has been a notifiable privacy breach. As noted above, the Act clarifies that liability for breach notifications sits with the business or organization, and not the individual employees. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 77 of 194 Table of Contents76The Privacy Act introduces a new privacy principle, principle 12, which regulates how agencies can transfer personal information overseas to foreign entities and individuals. Agencies can only transfer personal information where (1) an individual authorizes disclosure after being expressly told that their personal information might not be protected in the same way as under the Privacy Act, or (2) the discloser reasonably believes that (i) comparable privacy laws exist, (ii) other protections affording comparable privacy protections are in place (ie a contract), (iii) the receiver is in a prescribed country or subject to a prescribed scheme, or (iv) the receiver carries on business in New Zealand and is subject to the Privacy Act. The Privacy Act introduces new criminal offences. It is now an offence to mislead an agency to access someone else’s personal information, orfalsely pretend to be them or acting under their authority. It will also be an offence for an organisation or business to destroy personal information,knowing that a request has been made to access it. The maximum penalty for an offence is NZ$10,000.U.S. Regulations Relating to Securities and Futures Brokerage BusinessOur business is also subject to regulation, primarily by U.S. federal and state regulatory agencies and certain SROs, such as central banks andsecurities exchanges, that have been charged with the protection of the financial markets and the interests of those participating in those markets.We, along with other larger institutions, have been subject to a broad range of rules and regulations and a climate of heightened regulatory scrutiny,particularly with respect to compliance with laws and regulations, including financial and operational controls and business processes. Thisscrutiny and related rule-making has resulted in part from the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act, orthe Dodd-Frank Act, in 2010, which significantly changed the bank regulatory structure of our Company and its thrift subsidiaries. The substanceand full impact of the laws and regulations to which we are subject may be affected by changes in the U.S. political landscape, and we expect tocontinue to incur costs to implement new or phase-in requirements and monitor for continued compliance.Financial Services RegulationOur regulators are increasingly focused on ensuring that our customer privacy, data protection, information security and cyber security-relatedpolicies and practices are adequate to inform consumers of our data collection, use, sharing or security practices, to provide them with choices, ifrequired, about how we use and share their information, and to safeguard their personal information. We maintain systems designed to comply withthese privacy, data protection, information security and cyber security requirements, including procedures designed to securely process, transmitand store confidential information and protect against unauthorized access to such information.Our brokerage and banking entities are required by the Gramm-Leach-Bliley Act of 1999 to disclose their privacy policies and practices related tosharing customer information with affiliates and non-affiliates. These rules give customers the ability to “opt out” of having non-public informationdisclosed to third parties or receiving marketing solicitations from affiliates and non-affiliates based on non-public information received from ourbrokerage and banking entities. The Bank Secrecy Act, as amended by the U.S.A. PATRIOT ACT of 2001, or the BSA/USA PATRIOT Act, appliesto our brokerage and banking entities and requires financial institutions to develop anti-money laundering programs to assist in the prevention anddetection of money laundering and combating terrorism. In order to comply with the BSA/USA PATRIOT Act, we have an AML department that isresponsible for developing and implementing our enterprise-wide programs for compliance with the various anti-money laundering andcounterterrorist financing laws and us regulations. Our brokerage and banking entities are also subject to U.S. sanctions laws administered by theOffice of Foreign Assets Control and we have policies and procedures in place to comply with these laws.Brokerage Regulation and Capital RequirementsOur subsidiary, US Tiger Securities, Inc. and Marsco Investment Corporation, both U.S. broker-dealers, are registered with the SEC and is subjectto regulation by the SEC and by SROs, such as FINRA and the securities exchanges of which it is a member, as well as various state regulators.The SEC and other governmental agencies and self-regulatory organizations, as well as state securities commissions in the United States, have thepower to conduct administrative proceedings that can result in censure, penalties and fines, disgorgement of profits, restitution to customers, cease-and-desist orders or suspension, termination or limitation of the activities of the regulated entity or its employees. Marsco Investment Corporationis a registered member of The Depository Trust & Clearing Corporation (“DTC”) and National Securities Clearing Corporation (“NSCC”) Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 78 of 194 Table of Contents77Brokerage regulation covers various aspects of brokerage activities, including segregated cash requirements and net capital. Marsco InvestmentCorporation is a fully disclosed broker-dealer within the meaning of SEC Rule 15c3-3 under the Exchange Act, which requires segregation offunds in a special reserve account for the benefit of customers. US Tiger Securities, Inc. and Marsco Investment Corporation are subject to theUniform Net Capital Rule, Rule 15c3-1 under the Exchange Act, which requires the maintenance of minimum net capital. Brokerage regulationalso covers other brokerage activities, including required books and records, customer suitability, safekeeping of funds and securities, trading,prohibited transactions, public offerings, margin lending, customer qualifications for margin and options transactions, registration of personnel andtransactions with affiliates. These net capital requirements are designed to measure the financial soundness and liquidity of broker-dealers. The netcapital rule imposes certain requirements that may have the effect of preventing a broker-dealer from distributing or withdrawing capital and mayrequire that prior notice to the regulators be provided prior to making capital withdrawals. Compliance with net capital requirements could limitoperations that require the intensive use of capital, such as trading activities and underwriting, and may limit the ability of our broker-dealersubsidiaries to pay dividends to us.Investment Adviser RegulationOur wholly-owned subsidiary, Wealthn LLC, is registered as an investment adviser under the Investment Advisers Act of 1940, as amended with theSEC, or the Investment Advisers Act. As a registered investment adviser, Wealthn LLC is subject to the fiduciary and other obligations imposedunder the Investment Advisers Act and the rules and regulations promulgated thereunder, as well as applicable state securities laws. The InvestmentAdvisers Act imposes numerous obligations on registered investment advisers such as Wealthn LLC, including recordkeeping, operational andmarketing requirements, disclosure obligations and prohibitions on fraudulent activities. State-level regulations through the Attorneys General,state securities regulators and other state level agencies also apply to certain activities of Wealthn LLC.The Investment Company Act of 1940, as amended, or the Investment Company Act, also imposes stringent governance, compliance, operational,disclosure and related obligations on registered investment companies and their investment advisers, such as Wealthn LLC, and distributor(s) andits affiliated companies. The SEC is authorized to institute proceedings and impose sanctions for violations of the Advisers Act and the InvestmentCompany Act, ranging from fines and censure to termination of an investment adviser’s registration. Non-compliance with the Advisers Act, theInvestment Company Act or other federal and state securities laws and regulations could result in investigations, sanctions, disgorgement, fines andreputational damage, as well as temporary or permanent prohibition of certain activities, related client terminations or other sanctions.Singapore Regulations Relating to Securities and Futures Brokerage BusinessTiger Brokers (Singapore) Pte Ltd (“Tiger Brokers SG”) is a capital markets services license holder under the Securities and Futures Act, Chapter289 of Singapore (the "SFA") for (I) dealing in capital markets products that are securities, collective investment schemes, and exchange-tradedderivatives contracts; (II) product financing; and (III) providing custodial services, and an exempt financial adviser under the Financial AdvisersAct, Chapter 110 of Singapore (the FAA) for advising on investment products and issuing or promulgating analyses/reports on investment productsthat are securities, collective investment schemes, and exchange-traded derivatives contracts. It is also currently in the process of applying for alicence under the Payment Services Act 2019, has not commenced any business in any “payment services” as defined under that Act. It is subject toregulation by the Monetary Authority of Singapore (“MAS”). Under the SFA, there is a requirement to maintain sufficient capital (“CAR”) as partof its condition to operate the business in Singapore. CAR is calculated using a risk-based capital approach. For Tiger Brokers SG, the minimumbase capital requirement is SGD 1 million and, in addition, the firm is required to analyze its operational risk and determine further capitalrequirement according to the risk the business faces. Its financial resources (which definition includes its base capital) cannot fall below its totalrisk requirement (i.e. the amount required to address risks arising from its activities), and in the case that its financial resources fall below 120% ofits total risk requirement, it is required to immediately notify the MAS of this fact. Tiger Brokers SG minimally maintain at least 25% above theactual CAR requirement as a precaution against any sudden turn in the business environment. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 79 of 194 Table of Contents78Australian Regulations Relating to Financial Services BusinessAFSL obligationsUnder section 911A(1) of the Corporations Act 2001 in Australia, or the Corporations Act, a person who carries on a financial services business inAustralia must generally hold an Australian financial services license, or AFSL, unless a relevant exception applies.Relevant AFSL holdersFleming, or Fleming Funds Management, a company acquired by Tiger Brokers (NZ) Limited in November 2018, holds an AFSL authorizing it toprovide various financial services, including financial product advice, dealing and underwriting, in respect of a variety of financial products,including derivatives, government bonds, interests in managed investment schemes (such as collective investment vehicles) and securities, towholesale clients only (such as institutional investors and high net worth clients).Tiger Brokers (NZ) Limited, one of our New Zealand entities, has applied for, and has been granted, the authorization as an AFSL. It is subject tothe obligations set out below.Substantive obligationsAs AFSL holders, Tiger Brokers (NZ) Limited and Fleming are subject to the following obligations (among others):●to comply with various financial, capital and audit requirements;●to ensure that a nominated “responsible manager” is allocated responsibility for each financial service provided;●to ensure that its representatives who provide financial services are adequately trained and competent to do so;●to comply with the “client money” rules under Chapter 7.8 of the Corporations Act;●to comply with the financial record and order record keeping requirements under Chapter 7.8 of the Corporations Act;●to ensure it has in place adequate compliance arrangements in respect of the financial services it provides;●to have adequate financial, technological and human resources to provide the financial services covered by its license;●to comply with Australian financial services laws, and to take reasonable steps to ensure that its representatives comply with Australianfinancial services laws;●to do all things necessary to ensure that the Australian regulated activities are provided efficiently, honestly and fairly;●to have in place adequate arrangements for the management of conflicts of interest;●to have adequate risk management systems; and●to report significant breaches of Australian financial services laws, and its AFSL conditions, to the Australian Securities and investmentsCommission. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 80 of 194 Table of Contents79Hong Kong Regulations Relating to Trust Services ProvidersUnder the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Chapter 615 of the Laws of Hong Kong), or the AMLCTFO, trustor company service providers, or TCSPs, in Hong Kong need to apply for a license which is conditional on certain personnel (including theultimate owners) of such companies having satisfied a “fit and proper” test. The AMLCTFO also requires TCSPs to comply with the applicablestatutory customer due diligence and record-keeping requirements. TCSPs are regulated by the Registrar of Companies, through the Hong KongCompanies Registry, and are subject to its oversight.A TCSP is defined in the AMLCTFO to be a corporation which carries on a business providing trust or company services. Trust service as definedencompasses the provision in Hong Kong, by way of business, of the service of acting, or arranging for another person to act (i) as a trustee of anexpress trust or a similar legal arrangement; or (ii) as a nominee shareholder for a person other than a corporation whose securities are listed on arecognized stock market. On the other hand, company service encompasses the provision in Hong Kong, by way of business, of the service of(i) forming corporations or other legal persons; (ii) acting or arranging for another person to act as a director or a secretary of a corporation, as apartner of a partnership, or in a similar position in relation to other legal persons; and/or (iii) providing a registered office, business address,correspondence or administrative address for a corporation, a partnership or any other legal person or legal arrangement.The TCSP license is usually valid for a period of three years and renewable upon re-assessment of fit and proper requirements. Our indirectwholly-owned subsidiary, Kastle Limited, was granted a TCSP license for a period of three years starting from January 29, 2019. An applicationfor license renewal must be made at least 60 days before it is due to expire.Ongoing RequirementsAll licensed TCSPs are required to, on an ongoing basis, comply with its licensing conditions (if any) as well as the relevant provisions in theAMLCTFO and the guidelines issued by the Companies Registry from time to time, including those relating to customer due diligence and recordkeeping requirements. To this end, the senior management of licensed TCSPs are also required to appoint: (i) a director or senior manager as acompliance office, or CO, who has overall responsibility for the establishment and maintenance of the licensee’s anti-money laundering andcounter-terrorist financing systems; and (ii) a senior member of the licensee’s staff as the money laundering reporting officer, or MLRO, who is thecentral reference point for reporting suspicious transactions.In order that the CO and MLRO may discharge their responsibilities, the licensed TCSP’s senior management should ensure as far as practicablethat the CO and MLRO are independent of all operational and business functions, normally based in Hong Kong, capable of accessing all availableinformation, fully conversant in the relevant statutory and regulatory requirements and risks, provided with regular access to senior management,and of a sufficient level of seniority and authority. Depending on the scale, operation, nature of business and risk profile of the licensed TCSP, thesame person may be appointed as its CO and MLRO. Given the relatively small size of Kastle Limited, Mr. Yu Hin Yin has been appointed as bothits CO and MLRO since March 17, 2021.PRC Regulations Relating to Securities and Futures Brokerage BusinessUnder existing PRC securities laws and regulations, including Securities Law of the PRC, which was most recently amended on 28 December,2019 and the amended Securities Law of the PRC became effective on March 1, 2020, operating securities business in the PRC, including amongothers, securities brokerage business, futures brokerage business, stock option brokerage business, and securities and futures investment consultingservices, requires a securities brokerage license or certain other approvals from the Chinese Securities Regulatory Commission, or the CSRC. Inaddition, the Securities Law also stipulates that the offering and trading of securities outside the People’s Republic of China which disrupt thedomestic market order of the People’s Republic of China and harm the legitimate rights and interests of domestic investors shall be dealt withpursuant to the relevant provisions of this Securities Law, and legal liability shall be pursued. This is the second major set of amendments of theSecurities Law since the major revision in 2005. Three main changes have been widely reported and discussed, namely, (i) the reform of theregistration-based IPO system, (ii) the imposition of more severe punishments for violations, and (iii) the enhancement of protection for retailinvestors. Apart from these revisions, this article is intended to briefly introduce the following five aspects that are highlighted for foreigninstitutional investors, namely, (i) scope of application, (ii) program trading, (iii) prohibition on account lending and borrowing, (iv) short swingprofit, and (v) changes in regard to 5% shareholding. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 81 of 194 Table of Contents80Failure to comply with such laws and regulations may result in penalties, including rectification requirements, confiscation of illegal proceeds,fines or even shutting down of business. In relation to our business in the PRC, one of our PRC entities received a rectification notice issued by theBeijing branch of the CSRC in September 2016, which required us, among others, to refrain from providing support to unauthorized foreign serviceproviders that conduct securities business in China. Following the notice, we took certain rectification measures, including among others,(i) removing links to, and access to account opening functions of the website and the APP previously developed by such PRC entity; (ii) deleting“Zhengquan” (securities in Chinese) and “Gupiao” (stocks in Chinese) from the name of the APP previously developed by such PRC entity; and(iii) timely submitting in writing to the Beijing branch of the CSRC to brief on the rectification measures made by such PRC entity. Afterwards, wehad communicated with the Beijing branch of the CSRC for a few times and further adjusted our business in China to comply with PRC laws. Webelieve that we have taken necessary measures in response to such notice and as of the date of this report, we had not received any further inquiryor rectification requirement from the CSRC. However, we cannot assure you that the CSRC will take the same view as us and do not expect aformal notice from the CSRC to inform us whether our PRC entity had satisfied the requirements in the aforementioned notice. See Item 3.D “RiskFactors—Risks Related to Our Business and Industry—We may not be able to obtain or maintain all necessary licenses, permits and approvals andto make all necessary registrations and filings for our activities in multiple jurisdictions and related to residents therein, especially in China orotherwise related to PRC residents.”PRC Regulations Relating to Foreign InvestmentInvestment activities in the PRC by foreign investors are governed by the Guidance Catalog of Industries for Foreign Investment, or the GuidanceCatalog, which was promulgated and is amended from time to time by the Ministry of Commerce of the PRC, or the MOFCOM, and the NationalDevelopment and Reform Commission of the PRC, or the NDRC. The Guidance Catalog divides industries into three categories in terms of foreigninvestment, which are “encouraged,” “restricted” and “prohibited,” and any industries not listed under one of these categories are generally deemedto be permitted.On June 28, 2017, the MOFCOM and the NDRC jointly promulgated the Guidance Catalog, which came into effect on July 28, 2017. TheMOFCOM and NDRC promulgated on June 28, 2018 the Special Administrative Measures for Market Access of Foreign Investment (NegativeList) (Year 2018) and further amended it on June 30, 2019 and on June 23, 2020 into the Special Administrative Measures for Market Access ofForeign Investment (Negative List) (Year 2020), or the Negative List, to amend the Guidance Catalog. The Guidance Catalog (as amended by theNegative List) lists the industries and economic activities in which foreign investment in the PRC is encouraged, restricted or prohibited.Specifically, the Negative List provides that foreign investors shall hold no more than 50% of the equity interests in a service provider operatingcertain value-added telecommunications services other than for e-commerce, domestic multi-party communication, store and forward class and callcenter.On March 15, 2019, the Foreign Investment Law of PRC, or the FIL, was issued by the National People’s Congress and took effect on January 1,2020, which also provides that the industries in which foreign investment is not restricted and prohibited shall be administered under the principleof equal treatment to domestic investment. On December 26, 2019, the State Council published the FIL Implementation Rules, which took effecton January 1, 2020. Furthermore, on December 19, 2020, the NDRC and the MOFCOM jointly issued the Measures for Security Review ofForeign Investment, effective on January 18, 2021, which provides detailed guidance regarding security review of foreign investment that has apotential impact on national security.Foreign investment in telecommunications companies in the PRC is governed by the Provisions on Administration of Foreign-InvestedTelecommunications Enterprises, or the Foreign-Invested Telecommunications Enterprises Provisions, which were promulgated by the StateCouncil on December 11, 2001, and amended on September 10, 2008 and February 6, 2016. The Foreign-Invested Telecommunications EnterprisesProvisions prohibits a foreign investor from holding over 50% of the total equity interests in any value-added telecommunications service businessin China. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 82 of 194 Table of Contents81PRC Regulations Relating to Internet CompaniesRegulations on Value-Added Telecommunication ServicesPursuant to the Telecommunications Regulations of the PRC, or the Telecommunications Regulations, promulgated by the State Council onSeptember 25, 2000 and amended on July 29, 2014 and February 6, 2016, telecommunication service providers must obtain an operating licenseprior to the commencement operations. The Telecommunications Regulations categorize telecommunication services into basic telecommunicationservices and value-added telecommunication services. According to the Catalog of Telecommunications Business, attached to theTelecommunications Regulations, information services provided via fixed network, mobile network and Internet fall within value-addedtelecommunication services.Pursuant to the Administrative Measures on Internet Information Services, promulgated by the State Council in 2000 and amended in 2011,“Internet information services” refer to the provision of information through the Internet to online users, and are divided into “commercial Internetinformation services” and “non-commercial Internet information services”. Under the Telecommunications Regulations and relevant administrativemeasures, commercial operators of value-added telecommunications services must first obtain a license for conducting Internet content provisionservices, or an ICP License, from the Ministry of Industry and Information Technology, or the MIIT, or its provincial level branches. Otherwise,such operator might be subject to sanctions including corrective orders and warnings, imposition of fines and confiscation of illegal gains and, inthe case of significant infringement, orders to close the website.Our consolidated affiliated entity, Beijing Yiyi or its subsidiaries have applied for or obtained ICP License for providing financial and marketinformation to our users, while we cannot guarantee that our new Beijing Yiyi or its subsidiary may at all times continue or maintain suchlicense(s) due to uncertainties from PRC governmental authorities. With respect to the risk of not obtaining, continue or maintain the ICP License,please refer to “Item 3.D Risk Factors—Risks Relating to Doing Business in China—We may be adversely affected by the complexity,uncertainties and changes in PRC regulation of Internet-related businesses and companies, and any lack of requisite licenses, permits or approvalsapplicable to our business may have a material adverse effect on our business and results of operations.”Regulation on Mobile Internet Applications Information ServicesOur APP is also regulated by the Provisions on the Administration of Mobile Internet Applications Information Services, or the APP Provisions,promulgated by the CAC, on June 28, 2016 and effective on August 1, 2016. According to the APP Provisions, the providers of APPs shall notcreate, copy, publish or distribute information and content that is prohibited by laws and regulations. However, we cannot assure that all theinformation or content displayed on, retrieved from or linked to our APP comply with the requirements of the APP Provisions at all times. If ourAPP were found to be violating the APP Provisions, we may be subject to administrative penalties, including warning, service suspension orremoval of our APP from the relevant APP store, which may materially and adversely affect our business and operating results. See Item 3.D “RiskFactor—Risks Relating to Doing Business in China—We may be adversely affected by the complexity, uncertainties and changes in PRCregulation of Internet-related businesses and companies, and any lack of requisite licenses, permits or approvals applicable to our business mayhave a material adverse effect on our business and results of operations.” Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 83 of 194 Table of Contents82Regulations on Internet Audio-Video Program ServicesThe Administrative Regulations on Internet Audio-Video Program Services, or the Internet Audio-Video Program Services Regulationspromulgated by the State Administration of Press, Publication, Radio, Film and Television, or the SAPPRFT (which has been divided into NationalRadio and Television Administration, or NRTA, National Press and Publication Administration, or NPPA, and China Film Administration), whichbecame effective on January 31, 2008 and was amended on August 28, 2015, sets forth the principal rules and requirements on the Internet audio-video program services. According to the Internet Audio-Video Program Services Regulations and other regulations, an Internet audio-videoprogram service provider must obtain an audio-video license issued by National Radio and Television Administration before spreading audio-videoprograms via the Internet. The audio-video program services are defined as the activities of making, editing and integrating audio-video programsand providing them to the public via the Internet or providing services for other people to upload and spread audio-video programs. In addition, theInternet Audio-Video Program Services Regulations only allow state-owned or state-controlled enterprises to apply for such license. Any entity thatfails to obtain an audio-video license but operates relevant audio-video services may face administrative penalties including warnings, rectificationorders and fines of no more than RMB30,000, and in severe cases, bans from doing business, confiscation of equipment utilized in providing suchservices and fines ranging from one to two times of the investment amounts of the entity.Regulation on Internet PublishingOn February 4, 2016, the SAPPRFT, and the MIIT jointly issued the Administrative Measures of Internet Publishing Services, or the InternetPublishing Measures, which became effective on March 10, 2016. According to the Internet Publishing Measures, an entity shall obtain an onlinepublishing service license issued by the provincial branch of NPPA to provide online publishing services. Online publishing services refer to theprovision of online publications to the public through information networks. Online publications refer to digital works with publishing featuressuch as having been edited, produced or processed and are made available to the public through information networks.Regulations on Financial Information ServicesOn December 26, 2018, the CAC promulgated the Provisions on Administration of Financial Information Services, taking effect on February 1,2019. These provisions set forth general qualification, management and content requirements for financial information service providers if theyprovide financial information or data that may affect the financial market for users who engage in financial analysis, financial transactions,financial decisions or other financial activities. Specifically, financial information service providers are required to disclose the sources of thefinancial information or data in a clear and accurate manner, and shall not make, copy, publish or disseminate any content that covers, amongothers, false financial information that may detriment national financial security or stability of society, fictional event or news regarding thefinancial market (including that related to securities, funds, futures or foreign currency), or certain financial products or services that are forbiddenby the competent regulatory authorities. Violations of any of the requirements in these provisions may subject the financial information serviceproviders to penalties such as public condemnation and rectification orders.Regulations on Internet News DisseminationThe State Council Information Office promulgated the Interim Administrative Regulations for Publication News by Internet Websites in 2000 andAdministrative Regulations for Internet News Information Services in 2017. These regulations stipulate that general websites established by non-news organizations may publish news released by certain official news agencies if such websites satisfy the requirements set forth in the theseregulations but may not publish news items produced by themselves or other news sources. These regulations also require the general websites ofnon-news organizations to obtain permit and approval from the State Council Information Office at both the provincial and national level beforethey commence providing news dissemination services. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 84 of 194 Table of Contents83Regulations on Cyber SecurityInternet information in China is heavily regulated and restricted from as a national security issue stand point. The Standing Committee of theNational People’s Congress, or the SCNPC, enacted the Decision on Internet Security Protection in December 2000, as further amended inAugust 2009, which impose criminal liabilities on persons or entities that: (i) gain improper entry into a computer or system of strategicimportance; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial information; or (v) infringeintellectual property rights. The Ministry of Public Security has promulgated measures that prohibit the use of the Internet in ways that would resultin the leakage of state secrets or dissemination of socially destabilizing content. If an Internet information service provider violates these measures,the MPS and the local security bureaus may revoke its operating license and shut down its websites.In November 2016, the SCNPC promulgated the Cyber Security Law of the PRC, or the Cyber Security Law, which became effective on June 1,2017. The Cyber Security Law requires that network operators, which include, among others, Internet information services providers, taketechnical measures and other necessary measures in accordance with applicable laws and regulations and the compulsory requirements of thenational and industrial standards to safeguard the safe and stable operation of its networks. We are subject to such requirements as we are providingcertain Internet services through our APP and website. The Cyber Security Law further requires Internet information service providers to formulatecontingency plans for network security incidents, report to the competent departments immediately upon the occurrence of any incidentendangering cyber security and take corresponding remedial measures. In addition, according to the Cyber Security Law, operators of keyinformation infrastructures, which include public communications and information service, energy, transportation, water conservancy, financialindustry, public services, e-government affairs and other important industries and fields, shall store personal information and important datagathered and produced during operations in the PRC within the territory of the PRC. Where such information and data need to be transmittedoverseas based on commercial demand, a security assessment shall be conducted in accordance with the measures formulated by the nationalcyberspace administration authority in concert with the relevant departments under the State Council. However, there are no detailed measurespublished on how such security assessment shall be conducted. We may need to take certain security assessment measures on the personal datatransmitted cross border. With respect to the risk of personal information and important data storage and cross border transmission, please refer to“Item 3.D Risk Factors—If we fail to protect customer data and privacy, our reputation, financial condition and results of operations will bematerially and adversely affected.”Regulations on Privacy ProtectionInternet information service providers are also required to maintain the integrity, confidentiality and availability of network data. The CyberSecurity Law reaffirms the basic principles and requirements specified in other existing laws and regulations on personal data protection, such asthe requirements on the collection, use, processing, storage and disclosure of personal data, and Internet information service providers beingrequired to take technical and other necessary measures to ensure the security of the personal information they have collected and prevent thepersonal information from being divulged, damaged or lost. Any violation of the Cyber Security Law may subject the Internet information serviceprovider to warnings, fines, confiscation of illegal gains, revocation of licenses, cancellation of filings, shutdown of websites or criminal liabilities.Under the Several Provisions on Regulating the Market Order of Internet Information Services issued by the MIIT in December 2011 and CyberSecurity Law, an Internet information service provider may not collect any user’s personal information or provide any such information to thirdparties without that user’s consent, and it must also expressly inform that user of the method, content and purpose of the collection and processingof such user’s personal information and may only collect such information as necessary for the provision of its services. In addition, pursuant tothe Decision on Strengthening Internet Information Protection issued by the SCNPC in December 2012, the Order for the Protection ofTelecommunication and Internet User’s Personal Information issued by the MIIT in July 2013 and Cyber Security Law, any collection and use of auser’s personal information must be subject to the consent of the user, abide by the principles of legality, rationality and necessity and be within thespecified purposes, methods and scopes. An Internet information service provider must also keep such information strictly confidential, and isfurther prohibited from divulging, tampering or destroying of any such information, or selling or providing such information to other parties. AnInternet information service provider is required to take technical and other measures to prevent the collected personal information from anyunauthorized disclosure, damage or loss. Any violation of these laws and regulations may subject the Internet information service provider towarnings, fines, confiscation of illegal gains, revocation of licenses, cancellation of filings, closedown of websites or even criminal liabilities. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 85 of 194 Table of Contents84Pursuant to the Ninth Amendment to the Criminal Law issued by the SCNPC in August 2015 and becoming effective in November, 2015, anyInternet service provider that fails to fulfill the obligations related to Internet information security administration as required by applicable laws andrefuses to rectify upon orders, shall be subject to criminal penalty for the result of (i) any dissemination of illegal information in large scale; (ii) anysevere effect due to the leakage of the customer’s information; (iii) any serious loss of criminal evidence; or (iv) other severe situation, and anyindividual or entity that (i) sells or provides personal information to others in a way violating the applicable law, or (ii) steals or illegally obtain anypersonal information, shall be subject to criminal penalty in severe situation.In addition, the Interpretations of the Supreme People’s Court and the Supreme People’s Procuratorate of the PRC on Several Issues Concerningthe Application of Law in Handling Criminal Cases of Infringing Personal Information, issued in May 2017 and effective June 2017, clarifiedcertain standards for the conviction and sentencing of the criminals in relation to personal information infringement. Further, the NPC promulgateda new National Security Law, effective July 2015, to replace the former National Security Law and covers various types of national securityincluding technology security and information security.In November 2019, the Secretariat of the Cyberspace Administration of China, the General Office of the MIIT, the General Office of the Ministryof Public Security and the State Administration for Market Regulation jointly promulgated the Circular on Issuing the Methods for IdentifyingUnlawful Collection and Use of Personal Information of Applications, which defines actions that may be regarded as violating the NetworkSecurity Law and other personal information protection related regulations, including, among other things, failure to publicize the rules forcollection and use of personal information, failure to expressly state the purpose, manner and scope of collecting and using personal information,collection and use of personal information without consent of users, provision of personal information to others without consent, and failure toprovide the function of deleting or correcting personal information as required by law. On March 12, 2021, the aforesaid four departments jointlypromulgated the Circular on Issuing the Provision on the Range of Personal Information Necessary for Common Types of Mobile InternetApplication, which will come into effect on May 1, 2021. This circular defines specific information that 39 types of mobile internet application(“App(s)”), including mobile applications and programs on mobile applications, such as WeChat Mini Program, may collect for the basic functionsof such Apps.On March 6, 2020, the State Administration for Market Regulation and Standardization Administration of China, or SAC, jointly published theInformation Security Technology – Personal Information Security Specification (GB/T 35273-2020) (“2020 Specification”) proposed by theNational Information Security Standardization Technical Committee as an amendment to and replacement for the November 2017 version (GB/T35273-2017). The 2020 Specification, which took effect on October 1, 2020, explains and reinforces the Cyber Security Law. Though the 2020Specification is not a mandatory national standard but a recommended guideline, and it is not enforceable by law, the authority will use thisstandard to evaluate an entity’s compliance with China’s legal guidelines and regulations. The 2020 Specification outlines that “controllers” arethose who collect personal information for providing a product or service. The “subject” is the individual or entity that provides the personalinformation to the controller. The 2020 Specification seeks to provide the subject with more autonomy in how and when they provide personalinformation to controllers. Although the 2020 Specification clarifies issues such as biometric data, multiple business functions, and explicitconsent, it is still unclear to what extent the new standard will be enforced in China.Furthermore, on October 21, 2020, the SCNPC released a draft Personal Information Protection Law for public comments. The InformationProtection Draft stipulates that the Cyberspace Administration of China is responsible for coordinating the protection of personal information andthe related supervision and administration. The Information Protection Draft also expressly stipulates that those who process personal informationin violation of regulations or fail to take necessary security measures when processing personal information will be ordered to make corrections bythe authority responsible for personal information protection, and given a warning, with their illegal gains confiscated. If the violator refuses tomake corrections, it shall be subject to a fine of not more than RMB1.0 million. The person in charge directly responsible and other personsdirectly responsible shall be imposed a fine of not less than RMB10,000 but not more than RMB100,000. In case of any severe illegal acts asstipulated in the Information Protection Draft, the violator shall be ordered to make corrections by the authority responsible for personalinformation protection, have its illegal gains confiscated and be subject to a fine of not more than RMB50.0 million or no more than 5% of theturnover in the previous year, as well as a suspension of the relevant business, suspension for rectification, revocation of relevant business permit orbusiness license by the relevant competent authorities. The person in charge directly responsible and other persons directly responsible shall beimposed a fine of not less than RMB100.0 thousand but not more than RMB1.0 million. The Information Protection Draft is still in the process ofbeing reviewed, and it must be formally approved by the specific authority that has the power to enact the law before it can come into force. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 86 of 194 Table of Contents85PRC Regulations Relating to Foreign ExchangeRegulations on Foreign Currency ExchangeThe core regulations governing foreign currency exchange in China are the Foreign Exchange Administration Regulations, as amended inAugust 2008, or the FEA Regulations. Certain organizations in the PRC, including foreign invested enterprises, may purchase, sell and/or remitforeign currencies at certain banks authorized to conduct foreign exchange business upon providing valid commercial documents. However,approval of SAFE, is required for capital account transactions.In 2014, the SAFE decided to further reform the foreign exchange administration system in order to satisfy and facilitate the business and capitaloperations of foreign invested enterprises, and issued the Circular on the Relevant Issues Concerning the Launch of Reforming Trial of theAdministration Model of the Settlement of Foreign Currency Capital of Foreign-Invested Enterprises in Certain Areas on July 4, 2014, or theSAFE Circular 36. The SAFE Circular 36 suspends the application of the SAFE Circular 142 in certain areas and allows a foreign-investedenterprise registered in such areas to use the RMB capital converted from foreign currency registered capital for equity investments within thescope of business, which will be regarded as the reinvestment of foreign-invested enterprise. On March 30, 2015, the SAFE issued the Circular onthe Reforming of the Management Method of the Settlement of Foreign Currency Capital of Foreign-Invested Enterprises, or the SAFE Circular 19,which took effect on June 1, 2015, and replaced the SAFE Circular 142 and the SAFE Circular 36. According to the SAFE Circular 19, the foreignexchange capital of foreign-invested enterprises shall be subject to the Discretional Foreign Exchange Settlement. The Discretional ForeignExchange Settlement refers to the foreign exchange capital in the capital account of a foreign-invested enterprise for which the rights and interestsof monetary contribution has been confirmed by the local foreign exchange bureau (or the book-entry registration of monetary contribution by thebanks) can be settled at the banks based on the actual operational needs of the foreign-invested enterprise. The proportion of Discretional ForeignExchange Settlement of the foreign exchange capital of a foreign-invested enterprise is temporarily determined to be 100%. The Renminbiconverted from the foreign exchange capital will be kept in a designated account and if a foreign-invested enterprise needs to make furtherpayment from such account, it still needs to provide supporting documents and go through the review process with the banks.The SAFE issued the Circular on Reforming and Regulating the Policies for the Administration of Foreign Exchange Settlement under the CapitalAccount, or the SAFE Circular 16, in June 2016, which became effective simultaneously. Pursuant to the SAFE Circular 16, enterprises registeredin the PRC may also convert their foreign debts from foreign currency to Renminbi on a discretionary basis. The SAFE Circular 16provides an integrated standard for conversion of foreign exchange under capital account items (including but not limited to foreign currencycapital and foreign debts) on a discretionary basis which applies to all enterprises registered in the PRC. The SAFE Circular 16 reiterates theprinciple that Renminbi converted from foreign currency-denominated capital of a company may not be directly or indirectly used for purposesbeyond its business scope or prohibited by PRC laws or regulations, while such converted Renminbi shall not be provided as loans to its non-affiliated entities. As the SAFE has not provided detailed guidelines with respect to its interpretation or implementations, it is uncertain how theserules will be interpreted and implemented.In January 2017, the SAFE promulgated the Circular on Further Promoting the Reform of Foreign Exchange Administration and Improving theExamination of Authenticity and Compliance, or the SAFE Circular 3, which took effect on the same day. The SAFE Circular 3 sets out variousmeasures to tighten genuineness and compliance verification of cross-border transactions and cross-border capital flow, which include withoutlimitation requiring banks to verify board resolutions, tax filing form, and audited financial statements before wiring foreign invested enterprises’foreign exchange distribution above US$50,000, and strengthening genuineness and compliance verification of foreign direct investments.Our PRC subsidiaries’ distributions to their offshore parents are required to comply with the requirements as described above. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 87 of 194 Table of Contents86Regulations on Foreign Exchange Registration of Offshore Investment by PRC ResidentsPRC residents or entities who have contributed legitimate domestic or offshore interests or assets to the special purpose vehicles, or the SPVs, buthave yet to obtain the SAFE registration before the implementation of the Circular 37 shall register their ownership interests or control in suchSPVs with the SAFE or its local branch. An amendment to the registration is required if there is a material change in the registered SPV, such asany change of basic information including change of such PRC resident’s name and operation term, increases or decreases in investment amounts,transfers or exchanges of shares, or mergers or divisions. Failure to comply with the registration procedures set forth in Circular 37, or makingmisrepresentation or failure to disclose controllers of foreign-invested enterprise that is established through round-trip investment, may result inrestrictions on the foreign exchange activities of the relevant foreign-invested enterprises, including payment of dividends and other distributions,such as proceeds from any reduction in capital, share transfer or liquidation, to its offshore parent or affiliate, and the capital inflow from theoffshore parent, and may also subject relevant PRC residents or entities to penalties under PRC foreign exchange administration regulations.In February 2015, the SAFE further promulgated the Circular of the State Administration of Foreign Exchange on Further Simplifying andImproving Policies for the Foreign Exchange Administration of Direct Investment, or the SAFE Circular 13, effective June 2015. This SAFECircular 13 has amended the SAFE Circular 37 by requiring PRC residents or entities to register with qualified banks rather than the SAFE or itslocal branch in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing.The SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we make inthe future. All of our shareholders who, to our knowledge, are subject to the above SAFE regulations have completed the necessary registrationswith the local SAFE branch or qualified banks as required by the SAFE Circular 37.Mr. Tianhua Wu and some other individual shareholders who indirectly hold shares in our Company and who are known to us as being PRCresidents had completed the necessary registrations with the local SAFE branch or qualified banks as required by the SAFE Circular 37 in relationto their investment in our company. See Item 3.D “Risk Factors—We may be subject to penalties, including restrictions on our ability to injectcapital into our PRC subsidiaries, if our PRC resident shareholders or beneficial owners fail to comply with relevant PRC foreign exchangeregulations.” Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 88 of 194 Table of Contents87PRC Regulations Relating to the Individual Foreign ExchangeOn December 25, 2006, the PBOC issued the Administrative Measures for Individual Foreign Exchange, or the PBOC Order 3, which took effecton February 1, 2007. In addition, on January 5, 2007, the SAFE promulgated the Circular of the State Administration of Foreign Exchange onIssuing the Detailed Rules for the Implementation of the Measures for the Administration of Individual Foreign Exchange, or the SAFE 2007Circular 1, which took effect on the same day with the PBOC Order 3. Pursuant to the provision of the PBOC Order 3 and the 2007 Circular 1,individual foreign exchange businesses in the PRC can be classified into domestic and overseas individual foreign exchange businesses as pertransaction, and current accounts and capital accounts as per transaction property. Annual quota management shall be implemented for individualsettlement of exchange and individual foreign exchange purchase within the territory of the PRC. The annual quota for domestic individual’scurrent accounts equivalent to US$50,000 (including US$50,000). In case the total amount of the foreign exchange remitted abroad from his/herforeign exchange savings account in a same day does not exceed the amount equivalent to US$50,000 (including US$50,000), he/she shall dealwith it at a bank by presenting his/her valid identity certificate; if the total amount is more than the aforesaid amount, he/she shall handle it bypresenting the authentic voucher under the current account indicating the trading volume. As for capital account, a domestic individual maypurchase foreign exchange or remit abroad his/her self-owned foreign exchange upon the approval of the local foreign exchange department andshall conduct the corresponding formalities for the registration of foreign exchange for investing abroad. In March 2016, Ningxia Rongke receivedan inquiring notice from the SAFE that required it to review and report the status of our customers’ account opening and fund transfers on ourplatform. Ningxia Rongke made a written submission to the SAFE, which clarified that, among others, (i) at that time, Ningxia Rongke was arelated party to Tiger Holdings Group Limited, both of which did not participate in the process of the foreign currency purchase by our customers,and (ii) Ningxia Rongke was a technology company and Tiger Holdings Group Limited was a registered financial service provider in New Zealand.See Item 3.D “Risk Factor—Risks Related to Our Business and Industry—Violations of the relevant SAFE rules and regulations may give rise toregulatory inquiries, investigations or other actions, which may disrupt our business and could materially and adversely impact our results ofoperations and financial condition.” We believe that we took necessary measures in response to such inquiry and as of the date of this report, wehave not received any further similar inquiry or rectification requirement from the SAFE. However, we cannot assure you that the SAFE will takethe same view as us and do not expect a formal notice from the SAFE to inform us whether Ningxia Rongke had satisfied the requirements in theaforementioned notice.Regulations Relating to Intellectual Property RightsPRC Regulations for CopyrightThe Copyright Law of the PRC, promulgated in 1990 and amended in 2001 and 2010, or the Copyright Law, and its related implementingregulations, promulgated in 2002 and amended in 2013, are the principal laws and regulations governing the copyright related matters. OnNovember 11, 2020, the SCNPC issued amendment to the Copyright Law, which will become effective on June 1, 2021. The amended Copyrightlaw expands the scope of work protected by the copyright, the content of copyright, and the remedies for infringement of the copyright.Registration of copyright is voluntary, and it is administrated by the China Copyright Protection Center.PRC Regulations for PatentPursuant to the Patent Law of the PRC, or Patent Law, as amended in 2008, after the grant of the patent right for an invention or utility model,except where otherwise provided for in the Patent Law, no entity or individual may, without the authorization of the patent owner, exploit thepatent, that is, make, use, offer to sell, sell or import the patented product, or use the patented process, or use, offer to sell, sell or import anyproduct which is a direct result of the use of the patented process, for production or business purposes. After a patent right is granted for a design,no entity or individual shall, without the permission of the patent owner, exploit the patent, that is, for production or business purposes,manufacture, offer to sell, sell, or import any product containing the patented design. Once the infringement of patent is confirmed, the infringershall, in accordance with the regulations, undertake to cease the infringement, take remedial action, and pay damages, etc. On October 17, 2020,the SCNPC issued amendment to the Patent Law, which will become effective on June 1, 2021. The amended Patent Law expands the definition ofappearance design, enhances the protection on appearance design, increases the amount of compensation for infringement, and extends thelitigation period for infringement of patent. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 89 of 194 Table of Contents88PRC Regulations for TrademarkPursuant to the Trademark Law of the PRC, as amended in 2013 and 2019, the right to exclusive use of a registered trademark shall be limited totrademarks which have been approved for registration and to goods for which the use of such trademark has been approved. The period of validityof a registered trademark shall be ten years, counted from the day the registration is approved. According to this law, using a trademark that isidentical to or similar to a registered trademark in connection with the same or similar goods without the authorization of the owner of theregistered trademark constitutes an infringement of the exclusive right to use a registered trademark. The infringer shall, in accordance with theregulations, undertake to cease the infringement, take remedial action, and pay damages, etc. The trademark application for class 36 of our “Tiger”brand and logo was contested and is currently pending approval. We also discovered a mischievous pending class 36 application of a trademarksimilar to our “Tiger” brand and logo by others. See Item 3.D “Risk Factors—Risks Related to Our Business and Industry—We may not be able toprotect our intellectual property rights.”PRC Regulations for Domain NamePursuant to Measures for the Administration of Internet Domain Names promulgated on August 24, 2017 and effective on November 1, 2017,“domain name” shall refer to the character mark of hierarchical structure, which identifies and locates a computer on the Internet and correspondsto the Internet protocol address of that computer. The principle of “first come, first serve” is followed for the domain name registration service.After completing the domain name registration, the applicant becomes the holder of the domain name registered by the same. Any organization orindividual may file an application for settlement with the domain names dispute resolution institution or file a lawsuit in the PRC courts inaccordance with the PRC law, if such organization or individual consider the domain names registered or used by others infringe upon the legalrights and interests of the former.PRC Regulations Relating to Dividend DistributionThe principal regulations governing the distribution of dividends paid by wholly foreign-owned enterprises include the Wholly Foreign-OwnedEnterprise Law issued in 1986 and most recently amended in 2016, and the Detailed Rules for the Implementation of the Law of the People’sRepublic of China on Wholly Foreign-owned Enterprises issued in 1990 and most recently amended in 2014 , both of which have been supersededfrom January 1, 2020 by the FIL and FIL Implementation Rules, and the Company Law of the People’s Republic of China issued in 1999 and mostrecently amended in 2018. Under these regulations, wholly foreign-owned enterprises in China may pay dividends only out of their accumulatedprofits, if any, as determined in accordance with PRC accounting standards and regulations, provided that, a wholly foreign-owned enterprise inChina shall firstly set aside at least 10% of its after-tax profit based on PRC accounting standards each year to its general reserves until itscumulative total reserve funds reaches 50% of its registered capital. These reserve funds, however, may not be distributed as cash dividends.Regulations Relating to TaxNew Zealand Regulations on TaxNew Zealand imposes income tax on the worldwide income of taxpayers that are resident in New Zealand for New Zealand tax purposes, orNew Zealand tax residents, and also on all other income that is treated as having a New Zealand source for New Zealand income tax purposes.New Zealand does not currently have an express capital gains tax (although such a tax has been considered by various policy makers). The conceptof income for New Zealand income tax purposes includes amounts that may be viewed as capital in some other jurisdictions, and in some casesincludes deemed or attributable income that may not correlate in terms of timing or quantum with monetary receipts or actual economic gains.A company will be treated as being resident in New Zealand for income tax purposes if it is incorporated in New Zealand, has its head office inNew Zealand, has its center of management in New Zealand, or its directors, in their capacity as directors, exercise control of the company inNew Zealand, even if the directors’ decision-making also occurs outside New Zealand.The rate of income tax for New Zealand tax resident companies, and companies that are not New Zealand tax resident companies but which deriveNew Zealand sourced income, is currently 28%. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 90 of 194 Table of Contents89Income tax paid by a New Zealand tax resident company can give rise to imputation credits that, subject to sufficient continuity of ownership beingmaintained in respect of the company, can be attached to dividends that the company pays. Such imputation credits attached to dividends mayreduce the amount of New Zealand withholding tax and New Zealand income tax that is payable by the recipient of the dividend.Dividends paid by a New Zealand tax resident company may be subject to withholding tax. The rate of withholding tax for dividends paid to ashareholder which is not a New Zealand tax resident is up to 30%. It is possible in certain circumstances for a New Zealand tax resident companyto pay a supplementary dividend that effectively offsets the cost of the withholding tax that is imposed on the dividend. No withholding tax orincome tax is usually payable when dividends are paid between companies that are both New Zealand tax resident and members of the same whollyowned group of companies, or where a cash dividend with full imputation credits attached is paid to a non-resident who holds at least 10% directownership interest of the dividend paying company.The rate of tax imposed on taxpayers who are tax resident in a jurisdiction that New Zealand has entered into a double tax agreement with mayhave the rate of New Zealand tax, whether income tax or withholding tax, imposed on them reduced by the terms of that double tax agreement.New Zealand also imposes goods and services tax, or GST, on supplies deemed to be made in New Zealand of most goods and services. The rate ofGST is usually 15%. GST is also imposed on certain imports of goods and services into New Zealand. Certain supplies such as financial services,as defined, are generally exempt from GST. Goods and services supplied to non-resident recipients are generally subject to GST at a reduced rateof 0%.New Zealand Regulations on the Application of the Common Reporting StandardIn July 2014, the Organization for Economic Co-operation and Development, or the OECD, approved the Common Reporting Standard (CRS) forAutomatic Exchange of Financial Account Information in Tax Matters (AEOI) to provide a global framework for the collection, reporting, andexchange of financial account information about persons that invest outside of their jurisdiction of tax residence. This aim of the CRS is to detectand deter offshore tax evasion and the CRS requires financial institutions to carry out certain due diligence and reporting measures, including butnot limited to, review of their financial accounts so as to identify the accounts held or controlled by relevant foreign tax residents and collect and, inthe case where an AEOI agreement in place between the two jurisdictions requiring the provision of such information, report the relevantinformation to the local revenue authority for exchange with the jurisdiction(s) of tax residence of the account holder or controlling person.The New Zealand Government has made international commitments to implement the CRS in full accordance with the CRS and also thecommentary to the CRS with supplements of the aforementioned due diligent and reporting measures. Therefore, both the CRS and the CRScommentary have been directly incorporated into New Zealand law, subject to certain modifications set out in the Tax Administration Act 1994,and the CRS started to apply in New Zealand from July 1, 2017. Further, New Zealand has adopted different standards of due diligence andreporting requirements for different financial accounts. A pre-existing individual account that is a cash value insurance contract or an annuitycontract is not required to be reviewed, identified or reported, provided the reporting financial institution is effectively prevented by law fromselling such contract to residents of a reportable jurisdiction while the procedures also vary with the value of the accounts.Our New Zealand entity, Tiger Brokers (NZ) Limited, as a New Zealand financial institution, is required to annually report, with the coverage ofthe year ended March 31, the account and identity information to the New Zealand Inland Revenue Department, which will be exchanged with theperson’s jurisdiction(s) of tax residence if New Zealand has an AEOI agreement to provide this information to that jurisdiction or thosejurisdictions, and the information about certain individual accounts that the CRS refers to as being “undocumented accounts” where the institutionhas not been able to identify the person’s tax residency. We have filled two CRS disclosure reports to the New Zealand Inland Revenue Departmentin June 2018 and June 2019 respectively, with coverage of the required information of our consolidated accounts that were opened prior toMarch 31, 2019 (including March 31, 2019). Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 91 of 194 Table of Contents90PRC Regulations on Dividend Withholding TaxPursuant to the Double Tax Avoidance Arrangement, and other applicable PRC laws, if a Hong Kong resident enterprise is determined by thecompetent PRC tax authority to have satisfied the relevant conditions and requirements under the Double Tax Avoidance Arrangement and otherapplicable laws, the 10% withholding tax on the dividends the Hong Kong resident enterprise receives from a PRC resident enterprise may bereduced to 5% upon conducting prescribed registration procedures with in-charge tax authority. However, based on the Circular on the Issuesconcerning the Application of the Dividend Clauses of Tax Agreements issued on February 20, 2009 by the SAT, if the relevant PRC tax authoritiesdetermine, in their discretion, that a company benefits from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven, such PRC tax authorities may adjust the preferential tax treatment; and based on the Announcement of the State Administration of Taxationon Issues Relating to “Beneficial Owner” in Tax Treaties , issued on February 3, 2018 by the SAT, Beneficial Owner means a person who owns andcontrols income or the Announcement rights or property based on which the Recognition of Beneficial Owners in Tax Treaties issued on June 29,2012 by income is generated. It also lays out the SAT negative factors that shall be taken into account when assessing whether a recipient of China-source income is a Beneficial Owner under tax treaty. Generally, conduit companies, which are established for the purpose of evading or reducingtax, or transferring or accumulating profits, will not be recognized as beneficial owners and thus are not entitled to the above-mentioned reducedincome tax rate of 5% under the Double Tax Avoidance Arrangement.Regulations on Tax regarding Indirect TransferOn February 3, 2015, the State Administration of Taxation, or the SAT, issued the SAT Circular 7. Pursuant to the SAT Circular 7, an “indirecttransfer” of assets, including equity interests in a PRC resident enterprise, by non-PRC resident enterprises, may be re-characterized and treated asa direct transfer of PRC taxable assets, if such arrangement does not have a reasonable commercial purpose and is established for the purpose ofavoiding payment of PRC enterprise income tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise incometax. When determining whether there is a “reasonable commercial purpose” of the transaction arrangement, considerations include, inter alia,(i) whether the main value of the equity interest of the relevant offshore enterprise derives directly or indirectly from PRC taxable assets;(ii) whether the assets of the relevant offshore enterprise mainly consists of direct or indirect investment in China or if its income is mainly derivedfrom China; and (iii) whether the offshore enterprise and its subsidiaries directly or indirectly holding PRC taxable assets have real commercialnature evidenced by their actual function and risk exposure. According to the SAT Circular 7, where the payer fails to withhold any or sufficienttax, the transferor shall declare and pay such tax to the tax authority by itself within the statutory time limit. Late payment of applicable tax willsubject the transferor to default interest. The SAT Circular 7 does not apply to transactions of sale of shares by investors through a public stockexchange where such shares were acquired on a public stock exchange. On October 17, 2017, the SAT issued the Circular on Issues of TaxWithholding regarding Non-PRC Resident Enterprise Income Tax, or the SAT Circular 37, which further elaborates the relevant implementalrules regarding the calculation, reporting and payment obligations of the withholding tax by the non-resident enterprises. Nonetheless, there remainuncertainties as to the interpretation and application of the SAT Circular 7. The SAT Circular 7 may be determined by the tax authorities to beapplicable to our offshore transactions or sales of our shares or those of our offshore subsidiaries where non-resident enterprises, being thetransferors, were involved.PRC Regulations on Enterprise Income TaxUnder the Enterprise Income Tax Law of the PRC, or the EIT Law, which became effective on January 1, 2008 and was amended on February 24,2017, and its implementing rules, enterprises are classified as resident enterprises and non-resident enterprises. PRC resident enterprises typicallypay enterprise income tax at the rate of 25%, while non-PRC resident enterprises without any branches in the PRC pay an enterprise income tax inconnection with their income from the PRC at the tax rate of 10%. An enterprise established outside China but with its “de facto managementbody” located within China is considered a “resident enterprise,” which means that it is treated in a manner similar to a PRC domestic enterprisefor enterprise income tax purposes. The implementing rules of the EIT Law define “de facto management body” as a managing body that inpractice exercises “substantial and overall management and control over the production and operations, personnel, accounting, and properties” ofthe enterprise.The EIT Law and the implementation rules provide that an income tax rate of 10% will normally be applicable to dividends payable to investorsthat are “non-resident enterprises,” and gains derived by such investors, which (i) do not have an establishment or place of business in the PRC or(ii) have an establishment or place of business in the PRC, but the relevant income is not effectively connected with the establishment or place ofbusiness to the extent that such dividends and gains are derived from sources within the PRC. Such income tax on the dividends may be reducedpursuant to a tax treaty between China and other jurisdictions. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 92 of 194 Table of Contents91PRC Value-Added TaxOn December 12, 2013, the Ministry of Finance and the State Administration of Taxation, or the SAT, issued the Circular on Including the RailwayTransportation and Postal Industries in the Pilot Program of Replacing Business Tax with Value-Added Tax, or the Pilot Collection Circular. Thescope of certain modern services industries under the Pilot Collection Circular is expanded to cover research and development and technicalservices, cultural and creative services, and radio, film and television services. In addition, according to the Notice on Including theTelecommunications Industry in the Pilot Program of Levying Value-added Tax in Lieu of Business Tax, which became effective on June 1, 2014,the scope of certain modern services industries under the Pilot Collection Circular is further expanded to cover the telecommunications industry.On March 23, 2016, the Ministry of Finance and the SAT issued the Circular on Comprehensively Promoting the Pilot Program of the Collection ofValue-added Tax in Lieu of Business Tax. Effective from May 1, 2016, the PRC tax authorities collect the valued-added tax in lieu of Business Taxin all regions and industries. Pursuant to the Circular of the State Council on Effectively and Comprehensively Promoting the Pilot Program ofReplacing Business Tax with Value-Added Tax, recently amended by State Council on November 19, 2017.On April 4, 2018, the Ministry of Finance and the SAT issued the Circular on Adjustment of Value-added Tax Rates. According to which relevantValue-added Tax rates have been reduced from May 1, 2018 and April 1, 2019, such as the deduction rates of 17% and 11% applicable to thetaxpayers who have Value-Added taxable sales activities or imported goods have been adjusted to 13% and 9%, respectively.As of the date of this annual report, most of our entities were subject to the valued-added tax at the rate of 6% for services provided and 13% forgoods sold as of December 31, 2020.C. Organizational StructureUP Fintech is a holding company with no material operations of its own. We conduct our operations primarily through our New Zealandsubsidiaries, U.S. subsidiaries and our VIEs and their respective subsidiaries in China.A listing of the Company’s directly and indirectly owned subsidiaries at March 31, 2021 is set forth in Exhibit 8.1 to this annual report on Form 20-F.D. Property, Plant and EquipmentFacilitiesOur principal executive office is located in Beijing, China, where we lease approximately 3,852 square meters of office space. In addition to ourprincipal executive officer in Beijing, we also have leased properties principally for our operations in Auckland, New Zealand, Singapore and theState of Pennsylvania and the State of New York, United States and Hong Kong and other cities in China. Our leased premises are leased fromunrelated third parties who either have valid titles to the relevant properties or proper authorization from the title holder to sublease the property.We believe that we will be able to obtain adequate facilities, principally through leasing, to accommodate our future expansion plans.Item 5. Operating and Financial Review and ProspectsThe following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with theConsolidated Financial Statements, including the notes thereto, included in this annual report, as well as “Presentation of Financial and CertainOther Information,” Item 3.A. “Selected Financial Data,” Item 3.D. “Risk Factors” and Item 4.B. “Business Overview.”The following discussion includes certain forward-looking statements. Actual results may differ materially from those discussed in such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewherein this annual report, including in Item 5.G. “Safe Harbor” and Item 3.D. “Risk Factors.” Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 93 of 194 Table of Contents92OverviewWe are a leading integrated financial technology platform providing cross-market, multi-product investment experience for investors around theworld. Our proprietary trading platform enables investors to trade in equities and other financial instruments on multiple exchanges around theworld.We offer comprehensive brokerage services through our integrated single-account structure, which empowers users in trade execution, marginfinancing and securities lending across different global markets. We also provide value-added services, such as investor education, communityengagement and IR platform, all within a few taps or clicks through APP on smartphone, tablet and PC terminals.We generate revenues primarily by charging our customers commission fees for trading of securities as well as earning interest income or financingservice fees arising from or related to margin financing provided by ourselves or third parties to our customers to finance their trading activities.We have achieved substantial growth since we launched our platform in August 2015. Our total revenues were US$33.6 million, US$58.7 millionand US$138.5 million in 2018, 2019 and 2020, respectively. We recorded net losses of US$44.3 million and US$5.9 million in 2018 and 2019,respectively, and net income of US$19.2 million in 2020.ReorganizationWe commenced our technology research and development in June 2014 through one of our VIEs, Ningxia Xiangshang Rongke TechnologyDevelopment Co., Ltd., or Ningxia Rongke. To facilitate foreign investment in our business, starting from early 2018, we began to establish anoffshore holding structure for our company. As part of the efforts, we incorporated UP Fintech Holding Limited in January 2018, which controlsNingxia Rongke and its subsidiaries through a series of contractual arrangements. See Item 4.A “History and Development of the Company—Reorganization.”In connection with the reorganization, in June 2018, UP Fintech Holding Limited issued Series Angel (in four tranches), Series A, Series B-1, andSeries B-2 preferred shares to the shareholders of Ningxia Rongke or their affiliates or designees to replicate the corresponding Series Angel (infour tranches), Series A, Series B, and Series B+ equity interest with preferred rights issued by Ningxia Rongke prior to the reorganization, all ofwhich converted to Class A ordinary shares of the Company in connection with the completion of our initial public offering. UP Fintech HoldingLimited also adopted a new share incentive plan, or the 2018 Share Incentive Plan, to replicate and replace the equity incentive plan adopted byNingxia Rongke in 2014.A. Operating ResultsFactors Affecting Our Results of OperationsWe believe our business and operating results are affected by general factors affecting the online brokerage industry focusing on global Chineseinvestors, which include economic and political conditions, broad trends in business and finance, changes in volume of securities transactions,changes in the markets in which such transactions occur and changes in how such transactions are processed, growth of private wealth of theworldwide Chinese communities, demand for global asset allocation among global Chinese investors as well as changes in the regulatory regimeover the online brokerage industry. Unfavorable changes in any of these general financial and regulatory conditions, reduction in trading volume inthe U.S. and Hong Kong stocks and other financial instruments, unfavorable currency fluctuations and volatility of the trading activity onexchanges in the United States and other countries could negatively affect demand for our services and materially and adversely affect our resultsof operations.In addition, we believe our results of operations are more directly affected by company specific factors, including our ability to: maintain andexpand our customer base globally, maintain and enhance customer engagement, earn commissions for brokerage services and interest income orfinancing service fees for margin financing, effectively improve technology infrastructure and serve more consolidated accounts, develop a diversecustomer base and offer new and innovative products and services, and operate in a cost-effective manner. In addition, the laws, regulations andgovernmental policies of various jurisdictions may impact our operations, including New Zealand, U.S., PRC, Singapore, Australia and HongKong laws and regulations. See Item 4.B “Business Overview” for a summary of the principal applicable laws which may affect our business. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 94 of 194 Table of Contents93Critical Accounting Policies, Judgments and EstimatesAn accounting policy is considered critical if it requires an accounting estimate to be made based on assumptions about matters that are highlyuncertain at the time such estimate is made, and if different accounting estimates that reasonably could have been used, or changes in theaccounting estimates that are reasonably likely to occur periodically, could materially impact the consolidated financial statements.We prepare our financial statements in conformity with U.S. GAAP, which requires us to make judgments, estimates and assumptions. Wecontinually evaluate these estimates and assumptions based on the most recently available information, our own historical experiences and variousother assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the financialreporting process, actual results could differ from our expectations as a result of changes in our estimates. Some of our accounting policies requirea higher degree of judgment than others in their application and require us to make significant accounting estimates.The following descriptions of critical accounting policies, judgments and estimates should be read in conjunction with our consolidated financialstatements and other disclosures included in this annual report. When reviewing our financial statements, you should consider (i) our selection ofcritical accounting policies, (ii) the judgments and other uncertainties affecting the application of such policies and (iii) the sensitivity of reportedresults to changes in conditions and assumptions.Current Expected Credit LossesPrior to January 1, 2020, we applied incurred loss methodology for recognizing credit losses that delays recognition until it is probable a loss hasbeen incurred.On January 1, 2020, we adopted FASB ASC Topic 326—“Financial Instruments—Credit Losses” (“ASC Topic 326”) which replaces the incurredloss methodology with the current expected credit loss (“CECL”) methodology. The new guidance applies to financial assets measured atamortized cost, held-to-maturity debt securities and off-balance sheet credit exposures. For on-balance sheet assets, an allowance must berecognized at the origination or purchase of in-scope assets and represents the expected credit losses over the contractual life of those assets.The adoption of ASC Topic 326 has no impact on our retained earnings as of January 1, 2020.The impact to the current period is not material sincethe Company’s in scope assets are primarily subject to collateral maintenance provisions for which the Company elected to apply the practicalexpedient of reporting the difference between the fair value of collateral and the amortized cost for the in scope assets as the allowance for currentexpected credit losses.An allowance for credit losses on other financial assets, including receivables from clients, brokers, clearing organization, is estimated based on theaging of these financial receivables. Since most of the financial receivables are short-term in nature, the allowance for credit losses for otherfinancial assets were immaterial for all periods presented.Consolidation of Variable Interest EntitiesThe PRC government limits foreign ownership in PRC companies that operate Internet technology services and related business in China.Specifically, foreign investors are not allowed to own a controlling stake in any entity offering Internet technology services.In order to comply with these regulations, we control our entities in China through two sets of contractual arrangements entered into among ourWFOEs, Ningxia Yixin and Beijing Yixin, their respective VIEs and each VIE’s shareholders. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 95 of 194 Table of Contents94Pursuant to such contractual arrangements, Ningxia Yixin and Beijing Yixin are obligated to absorb a majority of the risk of loss and receive amajority of the residual returns from the VIEs’ activities. Such arrangements also enable us to direct the activities that most significantly affect theeconomic performance of the VIEs. Based on these contractual arrangements, we consolidate the VIEs as required by relevant rules, because wehold all the variable interests of the VIEs and are the primary beneficiary of the VIEs. In addition to the contractual arrangements with the variousPRC companies, we also hold variable interest in a sponsored fund. Our evaluation that we are the primary beneficiary of the fund is based on therelative portion of our beneficial interest within the shareholding structure of the fund and whether we have the power to direct the activities thatmost significantly affect the fund’s economic performance. We will reevaluate the initial determination of whether a legal entity is a consolidatedaffiliated entity when certain events occurs. We will also continuously reevaluate whether we are the primary beneficiary of our VIEs as facts andcircumstances change. See Item 3.D “Risk Factors—Risks Related to Our Corporate Structure.”Revenue recognitionCommissionsCommissions earned for the Group’s online brokerage business in customers’ fully disclosed accounts and consolidated accounts are charged foreach customer trade order executed and cleared by broker on a trade date basis and are reported as commissions in the consolidated statements ofcomprehensive income (loss).●Consolidated accounts. According to the attributes of transactions under consolidated accounts, the Group provides brokerage service forits customers. Commission fees are deducted from the customer’s account at the time of trade order initiation and a pre determinedportion is directed to the broker. The Group recognizes revenue at the time of execution of the order (i.e., trade date) on a gross basis asthe Group is determined to be the primary obligor in fulfilling the trade order initiated by the customer.●Fully disclosed accounts. According to the attributes of transactions under fully disclosed accounts, the Group provides the agreedservices to its customers in facilitating the trades. Every time the broker executes and clears a trade, the broker collects the commissions,deducts its pre determined portion and returns the rest of the commission fees to the Group. Accordingly, the commission fee is recordedon a net basis.Financing service feesFinancing service fees include fees paid by Interactive Brokers to us regarding the margin loans and securities borrowing and lending transactionsprovided by Interactive Brokers to our fully disclosed account customers for trading purposes.Interest incomeWe earn interest income from the margin loans and securities borrowing and lending activities provided by us to our consolidated accountcustomers for trading purposes and interest income from bank deposits.Other revenuesWe earn other revenues primarily from initial public offering (“IPO”) distribution service, promotional and advertisement services and others.Revenues from the IPO distribution service are derived from IPO underwriting and new share subscription services in relation to initial publicofferings in USA and Hong Kong capital markets.Income taxesCurrent taxes are provided for in accordance with the laws of the relevant tax authorities. Deferred taxes are recognized when temporarydifferences exist between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements. Deferred taxassets and liabilities, including those for net operating loss carryforwards are measured using enacted statutory tax rates applicable to future years.Deferred tax assets are reduced by a valuation allowance when, in the opinion of us, it is more likely than not that a portion of or all the deferredtax assets will not be realized. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 96 of 194 Table of Contents95Our accounts for uncertainty in income taxes by recording an unrecognized tax benefit resulting from tax positions taken or expected to be taken ina tax return. Tax benefits are recognized when we believe that it is more likely than not that the tax position will be sustained on examination by thetaxing authorities based on the technical merits of the position. A tax position that meets the more likely than not recognition threshold is measuredas the largest amount of tax benefit that is greater than 50 percent likely of being realized upon settlement. We presents interest and penalties, ifany, related to an underpayment of income taxes in income tax expense.We account for residual income tax effects in accumulated other comprehensive income due to a change in tax law or a change in judgment aboutrealization of a valuation allowance using the portfolio method and only release residual amounts when the entire portfolio is liquidated.Share-based compensationShare-based payment transactions with employees and managements, such as share options are measured based on the grant date fair value of theequity instrument. We have elected to recognize compensation expenses using the straight-line method for all employee equity awards granted withgraded vesting provided that the amount of compensation cost recognized at any date is at least equal to the portion of the grant-date value of theoptions that are vested at that date, over the requisite service period of the award, which is generally the vesting period of the award. Compensationexpenses for awards with performance conditions is recognized when it is probable that the performance condition will be achieved. We elect torecognize forfeitures when they occur. Compensation expenses for awards with service conditions is recognized on a straight-line method over therequisite service period.The cancellation of an award accompanied by the concurrent grant of a replacement award is accounted for as a modification of the terms of theawards. The incremental compensation cost is measured as the excess of the fair value of the modified award over the fair value of the modifiedaward at the modification date. The incremental portion of share-based compensation for the vested portion is recognized immediately and theincremental portion of share-based compensation for the unvested portion is recognized over the remaining vesting period of the award. If an awardis canceled without the concurrent grant of a replacement award or any other consideration, unrecognized compensation cost related to the canceledaward is recognized immediately upon cancelation.For awards granted with a performance condition that affects vesting, the performance condition is not considered in determining the award’sgrant-date fair value; however, the performance condition is considered when estimating the quantity of awards that are expected to vest. Nocompensation expense is recorded for awards with a performance condition unless and until the performance condition is determined to beprobable of achievement.Recent Accounting PronouncementsA list of recently issued accounting pronouncements that are relevant to us is included in Note 2 to our audited consolidated financial statementsincluded elsewhere in this annual report. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 97 of 194 Table of Contents96Key Components of Results of OperationsRevenuesOur revenues consist of commissions, financing service fees, interest income, and other revenues. The following table sets forth the breakdown ofour total revenues, both in absolute amount and as a percentage of our total revenues, for the years indicated:For the years ended December 31,201820192020 US$ % US$ % US$ %(in thousands except for percentages)Revenues:Commissions 26,043 77.6 26,698 45.5 77,629 56.1Financing service fees 6,442 19.2 7,927 13.5 6,577 4.7Interest income 85 0.3 16,505 28.1 31,754 22.9Other revenues 990 2.9 7,533 12.9 22,537 16.3Total revenues 33,560 100.0 58,663 100.0 138,497 100.0CommissionsWe earn commissions from the brokerage services we deliver for customers’ fully disclosed accounts and consolidated accounts. See Item 4.B“Business Overview—Our Core Products and Services—Brokerage Services—Types of Accounts.” We charge commission fees based on theamount of transaction volume, or the number of shares, lots or contracts in each order, which generally vary in accordance with the type ofproducts or services, timing of account activation, eligibility for discounts and other factors. In 2018, 2019 and 2020, the average rate ofcommissions over trading volume was 0.0272%, 0.0268% and 0.0354%, respectively, which is the ratio of the total commissions to the total tradingvolume in the same period. The gradual increase in the average commission rates was primarily caused by our product diversification as the portionof higher commission product increased in the year 2020.Pursuant to the agreement with our primary clearing agent, Interactive Brokers, we receive a portion of commission fees paid by our customersevery time Interactive Brokers executes and clears a trade order. For consolidated accounts, we receive commissions from customers and pay theexecution and clearing fees to our clearing agents. For fully disclosed accounts, every time Interactive Brokers executes and clears a trade, itcollects the commissions, deducts a certain portion as execution and clearing fees and returns the rest of the commissions to us.Financing service feesFinancing service fees include fees Interactive Brokers paid to us regarding the margin financing and securities borrowing and lending transactionsprovided by Interactive Brokers to our fully disclosed account customers for trading purposes. We generally charge a specific rate above theinterest rate of the margin loan or funding from the clearing agents. In 2018, 2019 and 2020, the average annualized rate of financing service feesover the average balance of the margin loans provided by the clearing agents was 0.87%, 0.91% and 0.47%, respectively. The decrease between2019 and 2020 was primarily due to the decreasing federal benchmark rate in 2020. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 98 of 194 Table of Contents97Interest incomeWe earn interest income from margin financing and securities borrowing and lending activities we provided to our consolidated account customersfor trading purposes. In 2018, 2019 and 2020, the average annualized rate of our margin financing and our securities borrowing and lendingactivities provided by us to the consolidated account customers on our platform was 5%, 11% and 9%, respectively. The decrease between 2019and 2020 was primarily due to the decreasing federal benchmark rate in 2020.Other revenuesWe earn other revenues primarily from initial public offering (“IPO”) distribution service, promotional and advertisement services and otherservice. Revenues from the IPO distribution service are derived from IPO underwriting fees and new share subscription service fees in relation toinitial public offerings in the USA and Hong Kong capital markets. IPO distribution revenue is generally recognized when the services arecompleted. We also earn revenue from promotional and advertisement services, and financial advisory service rendered to customers, which arerecorded over the period of service provided.Operating Cost and ExpensesThe following table sets forth our operating cost and expenses, both in absolute amount and as a percentage of total revenues, for the yearsindicated:For the years ended December 31,201820192020 US$ % US$ % US$ %(in thousands except for percentages)Execution and clearing 257 0.8 2,519 4.3 12,645 9.1Employee compensation and benefits (including share-based compensation) 55,656 165.8 35,788 61.0 50,039 36.1Occupancy, depreciation and amortization 2,622 7.8 3,572 6.1 4,736 3.4Communication and market data 3,559 10.6 6,494 11.1 10,320 7.5Marketing and branding 10,527 31.4 7,103 12.1 15,872 11.5General and administrative 7,831 23.3 9,260 15.8 13,749 9.9Total operating cost and expenses 80,452 239.7 64,736 110.4 107,361 77.5Execution and clearingExecution and clearing expenses primarily include the fees we pay to clearing agents to execute and clear trades. We only incur execution andclearing expenses for consolidated accounts as we pay a certain portion of the commissions we collect from our customers to clearing agents asexecution and clearing expenses. We do not incur execution and clearing expenses for fully disclosed accounts as the revenue is recognized on a netbasis. We expect that our execution and clearing expenses will increase in absolute amount and as a percentage of total revenues as we expand ourbrokerage business and serve more consolidated accounts.Employee compensation and benefitsEmployee compensation and benefits expenses include salaries, wages, bonuses, share-based compensation and other benefits for all employees.Our employee compensation and benefits expenses also include salaries, wages, bonuses and other benefits we pay to employees who are in ourresearch and development department, which represent substantially all of our research and development expenses. Research and developmentexpenses primarily consist of salaries and employee benefits, rental, and depreciation expense related to the development of our proprietary tradingplatform, back-end technology and customer relationship management system.Occupancy, depreciation and amortizationOccupancy expenses consist primarily of rental payments on office and data center leases and related occupancy costs, such as utilities.Depreciation and amortization expenses result from the depreciation of fixed assets, such as electronic equipment and office equipment, as well asleasehold improvements, and the amortization of intangible assets. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 99 of 194 Table of Contents98Communication and market dataCommunication and market data expenses are primarily related to the fees we pay to stock exchanges and third parties, including the Nasdaq,New York Stock Exchange, Hong Kong Stock Exchange and Shanghai Stock Exchange, to subscribe for market data and news. These expensesalso include bandwidth fees, expenses to acquire or maintain servers and data centers as well as other expenses relating to the telecommunicationinfrastructure.Marketing and brandingMarketing and branding expenses consist primarily of advertising and promotion expenses, payments to business partners pursuant to the revenue-sharing arrangements, customer referral fees and other expenses associated with our marketing and branding activities.General and administrativeGeneral and administrative expenses primarily consist of intermediary service expenses, travelling expenses, business entertainment expenses andmiscellaneous expenses relating to our facilities and other administrative expenses. Intermediary service fees primarily consist of fees we pay ourprofessional service providers including our lawyers, accountants and consultants.Loss before income taxesThe following table sets forth our loss before income taxes, both in absolute amount and as a percentage of our total revenues, for the yearsindicated.For the years ended December 31,201820192020 US$ % US$ % US$ %(in thousands except for percentages)Total revenues 33,560 100.0 58,663 100.0 138,497 100.0Interest expense — — (4,102) (7.0) (10,102) (7.3)Total net revenues 33,560 100.0 54,561 93.0 128,395 92.7Total operating cost and expenses (80,452) (239.7) (64,736) (110.4) (107,361) (77.5)Other income 725 2.2 870 1.5 996 0.7Income (Loss) before income taxes (46,167) (137.5) (9,305) (15.9) 22,030 15.9TaxationCayman IslandsWe are not subject to income or capital gains tax under the current laws of the Cayman Islands. There are no other taxes likely to be material to uslevied by the government of the Cayman Islands.British Virgin IslandsOur subsidiaries incorporated in the BVI are not subject to income or capital gains tax under the current laws of the BVI. There are no other taxeslikely to be material to us levied by the government of the BVI.New ZealandOur subsidiaries incorporated in New Zealand are subject to an income tax rate of 28% for taxable income earned in New Zealand. New Zealanddoes not impose a withholding tax on dividends for resident companies. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 100 of 194 Table of Contents99Hong KongOur subsidiaries incorporated in Hong Kong were subject to Hong Kong profits tax at a rate of 16.5% for taxable income earned in Hong Kongbefore April 1, 2018. Starting from the financial year commencing on April 1, 2018, the two-tiered profits tax regime took effect, under which thetax rate is 8.25% for assessable profits on the first HK$2 million and 16.5% for any assessable profits in excess of HK$2 million. Hong Kong doesnot impose a withholding tax on dividends.SingaporeOur subsidiaries incorporated in Singapore are subject to an income tax rate of 17% for taxable income earned in Singapore. Singapore does notimpose a withholding tax on dividends for resident companies. In 2018, 2019 and 2020, we did not incur any income tax as there was no estimatedassessable profit that was subject to Singapore income tax.AustraliaOur subsidiaries located in Australia and are subject to an income tax rate of 27.5% for taxable income earned in Australia. In 2018, 2019 and2020, we did not incur any income tax as there was no estimated assessable profit that was subject to Australia income tax.United StatesOur subsidiaries incorporated in the United States are subject to a federal income tax rate of 21% for taxable income earned in the USA.IndiaOur subsidiary incorporated in the India is subject to an income tax rate of 25% for taxable income earned in India. India does not impose awithholding tax on dividends for resident companies. In 2018, 2019 and 2020, we did not incur any income tax as there was no estimatedassessable profit that was subject to India income tax.ChinaOur PRC subsidiaries and our VIEs, which are considered PRC resident enterprises under PRC tax law, are subject to enterprise income tax on theirworldwide taxable income as determined under PRC tax laws and accounting standards, the EIT Law. Under the EIT Law, the standard enterpriseincome tax rate for domestic enterprises and foreign invested enterprises is 25%. In addition, the EIT Law and its implementing rules permitqualified “State-encouraged High-new Technologies Company,” or the HNTE, to enjoy a reduced 15% EIT rate. One of our VIEs’ subsidiaries,Beijing U-Tiger Business Service Co., Ltd began to qualify as an HNTE under the EIT Law in 2017, subject to the tax rate of 15% with a validperiod of three years starting from December 2017 and obtained new certificate on December 2, 2020, subject to the tax rate of 15% with a validperiod of three years. Our other subsidiaries, VIEs and VIEs’ subsidiaries incorporated in China are subject to income tax rate of 25%, according toEIT Law.In addition, our VIEs and VIEs’ subsidiaries are subject to value-added taxes, or VAT, on the services they provide at the rate of 6% or 3%,depending on whether the entity is a general taxpayer or small-scale taxpayer, plus related surcharges, less any deductible VAT they have alreadypaid or borne. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 101 of 194 Table of Contents100Dividends paid by our wholly foreign-owned subsidiaries, or WFOEs in China to our intermediary holding companies in Hong Kong will besubject to a withholding tax rate of 10%, unless they qualify for a special exemption. If our intermediary holding companies in Hong Kong satisfyall the requirements under the Double Taxation Arrangement and receive the approval from the relevant tax authority, the dividends paid to themby our WFOEs in China will be subject to a withholding tax rate of 5% instead. See Item 3.D “Risk Factors—Risks Related to Doing Business inChina—We may not be able to obtain certain tax benefits for dividends paid by our PRC subsidiaries to us through our Hong Kong subsidiaries.”If our holding company in the Cayman Islands or any of our subsidiaries outside of China were deemed to be a “resident enterprise” under the EITLaw, it would be subject to enterprise income tax on its worldwide income at a rate of 25%. See Item 3.D “Risk Factors—Risks Related to DoingBusiness in China—We may be deemed to be a PRC resident enterprise under the Enterprise Income Tax Law, or the EIT Law, and be subject tothe PRC taxation on our worldwide income, which may significantly increase our income tax expenses and materially decrease our profitability.”Non-GAAP Financial MeasuresIn evaluating our business, we consider and use adjusted net loss as a supplemental measure to review and assess our operating performance. Thepresentation of the non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial informationprepared and presented in accordance with U.S. GAAP. We define adjusted net loss as net loss excluding share-based compensation andimpairment loss from available for sale securities. Such adjustments have no impact on income tax.We present these non-GAAP financial measures because it is used by our management to evaluate our operating performance and formulatebusiness plans. Adjusted net loss enables our management to assess our operating results without considering the impact of share-basedcompensation and impairment loss from available for sale securities. We also believe that the use of these non-GAAP financial measures facilitateinvestors’ assessment of our operating performance.These non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. These non-GAAPfinancial measures have limitations as an analytical tool. One of the key limitations of using adjusted net loss is that they do not reflect all items ofincome and expense that affect our operations. Share-based compensation and impairment loss from available for sale securities have been and maycontinue to be incurred in our business and are not reflected in the presentation of adjusted net loss. Further, these non-GAAP financial measuresmay differ from the non-GAAP financial information used by other companies, including peer companies, and therefore their comparability maybe limited.These non-GAAP financial measures should not be considered in isolation or construed as alternatives to total operating expenses, net loss or anyother measure of performance or as an indicator of our operating performance. Investors are encouraged to review these historical non-GAAPfinancial measures in light of the most directly comparable GAAP measures, as shown below. These non-GAAP financial measures presented heremay not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measuresdifferently, limiting the usefulness of such measures when analyzing our data comparatively. We encourage investors and others to review ourfinancial information in its entirety and not rely on a single financial measure. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 102 of 194 Table of Contents101Results of OperationsThe following table sets forth a summary of our consolidated results of operations for the period indicated, both in absolute amounts and aspercentages of our total revenues. This information should be read together with our consolidated financial statements and related notes includedelsewhere in this annual report. The operating results in any period are not necessarily indicative of the results that may be expected for anyfuture period. The table below also sets forth a reconciliation of adjusted net loss, a non-GAAP financial measure, to GAAP net loss.For the years ended December 31,201820192020 US$ % US$ % US$ %(in thousands except for percentages)Consolidated Statements of Operations Data: Revenues: Commissions 26,043 77.6 26,698 45.5 77,629 56.1Financing service fees 6,442 19.2 7,927 13.5 6,577 4.7Interest income 85 0.3 16,505 28.1 31,754 22.9Other revenues 990 2.9 7,533 12.9 22,537 16.3Total revenues 33,560 100.0 58,663 100.0 138,497 100.0Interest expense — — (4,102) (7.0) (10,102) (7.3)Total net revenues 33,560 100.0 54,561 93.0 128,395 92.7Operating cost and expenses: Execution and clearing (257) (0.8) (2,519) (4.3) (12,645) (9.1)Employee compensation and benefits (including share-basedcompensation) (55,656) (165.8) (35,788) (61.0) (50,039) (36.1)Occupancy, depreciation and amortization (2,622) (7.8) (3,572) (6.1) (4,736) (3.4)Communication and market data (3,559) (10.6) (6,494) (11.1) (10,320) (7.5)Marketing and branding (10,527) (31.4) (7,103) (12.1) (15,872) (11.5)General and administrative (7,831) (23.3) (9,260) (15.8) (13,749) (9.9)Total operating cost and expenses (80,452) (239.7) (64,736) (110.4) (107,361) (77.5)Other income: 725 2.2 870 1.5 996 0.7(Loss)/income before income taxes (46,167) (137.5) (9,305) (15.9) 22,030 15.9Income tax benefits/(expenses) 1,873 5.5 3,355 5.7 (2,851) (2.1)Net (loss)/income (44,294) (132.0) (5,950) (10.1) 19,179 13.8Add non-GAAP adjustment Share-based compensation 34,205 101.9 4,063 6.9 6,055 4.4Impairment loss from equity investments — — 756 1.3 151 0.1Adjusted Non GAAP Net (loss)/income (10,089) (30.1) (1,131) (1.9) 25,385 18.3For discussion of 2018 and 2019 results, refer to our Annual Report on Form 20-F available on the internet site maintained by the SEC atwww.sec.gov.Year ended December 31, 2020 compared with year ended December 31, 2019RevenuesTotal revenues increased by 136.1% from US$58.7 million in 2019 to US$138.5 million in 2020. This increase was primarily driven by significantincreases in commissions and interest income.Commissions. Commissions were US$77.6 million in 2020, a 190.8% increase from US$26.7 million in 2019, driven by an increase in our userbase and market activities. The customers with deposits increased from 113.2 thousand to 258.7 thousand during this year.Financing service fees. Financing service fees were US$6.6 million in 2020, down 17.0% from US$7.9 million in 2019, primarily due to lowerinterest rates. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 103 of 194 Table of Contents102Interest income. Interest income was US$31.8 million in 2020, up 92.4% from US$16.5 million in 2019. This was primarily due to an increase inconsolidated account customers and margin activities.Other revenues. Other revenues were US$22.5 million in 2020, an increase of 199.2% from US$7.5 million in 2019. The increase was primarilydue to higher revenue from IPO distribution services.Operating cost and expensesTotal operating cost and expenses increased by 65.8% from US$64.7 million in 2019 to US$107.4 million in 2020, due to significant increases inshare-based compensation expense and marketing and branding expense and execution and clearing expense.Execution and clearing. Execution and clearing expenses were US$12.6 million in 2020, an increase of 401.9% from US$2.5 million in 2019.This increase was primarily due to the significant increase of trading volume on our consolidated accounts, which resulted in increasedcommissions we paid to Interactive Brokers as execution and clearing fees.Employee compensation and benefits. Employee compensation and benefits expenses were US$50.0 million in 2020, an increase of 39.8% fromUS$35.8 million in 2019, primarily due to a headcount increase and associated share based compensation compared to 2019.Occupancy, depreciation and amortization. Occupancy, depreciation and amortization expenses were US$4.7 million in 2020, an increase of32.6% from US$3.6 million in 2019, due to an increase in office space and relevant leasehold improvements.Communication and market data. Communication and market data expenses were US$10.3 million in 2020, an increase of 58.9% from US$6.5million in 2019. This increase was due to rapid user growth and expanded market data usage by our users.Marketing and branding. Marketing and branding expenses were US$15.9 million in 2020, an increase of 123.4% from US$7.1 million in 2019.This increase was derived from our continuous efforts to expand globally in accordance with our internationalization strategy, which has resulted inclient base growth.General and administrative. General and administrative expenses were US$13.7 million in 2020, an increase of 48.5% from US$9.3 million in2019. This increase was primarily due to business expansion and more professional services.(Loss)/income before income taxWe had a profit before income taxes of US$22.0 million in 2020, compared with a loss before income taxes of US$9.3 million in 2019, primarilydue to the increase in total revenues and decrease in total operating costs and expenses in 2020.Income tax benefits/(expenses)We had income tax expenses of US$2.9 million in 2020, compared with income tax benefits of US$3.4 million in 2019, primarily due to a profit wehad made in 2020.Net (loss)/incomeNet income increased to US$19.2 million in 2020 as compared to net loss of US$5.9 million in 2019.Non-GAAP net income, which excluded share-based compensation and impairment loss from equity investments, was US$25.4 million in 2020, ascompared to a US$1.1 million non-GAAP net loss in 2019. See “Non-GAAP Financial Measures” for more information. See Item 5.A “OperatingResults - Non-GAAP Reconciliations.”SeasonalityWe have not experienced seasonality in our business. However, as our brokerage business only began operations in 2015, volatility that may beinherent in the online brokerage industry could be masked by our rapid growth. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 104 of 194 Table of Contents103Year ended December 31, 2019 compared with year ended December 31, 2018RevenuesTotal revenues increased by 74.8% from US$33.6 million in 2018 to US$58.7 million in 2019. This increase was primarily driven by significantincreases in interest income and other revenues.Commissions. Commissions increased by 2.5% from US$26.0 million in 2018 to US$26.7 million in 2019, primarily due to the increased trading volume from our consolidated account customers. Financing service fees. Financing service fees increased by 23.0% from US$6.4 million in 2018 to US$7.9 million in 2019, primarily due to the increased margin trading and securities borrowing and lending transactions activities.Interest income. Interest income increased from US$85,361 in 2018 to US$16.5 million in 2019 due to increased margin trading and securities borrowing and lending transactions activities and more consolidated account customers compared to last year. Other revenues. Other revenues increased by 660.9% from US$1.0 million in 2018 to US$7.5 million in 2019, primarily due to a US$2.7 million increase in IPO distribution revenues in relation to active IPOs in the US and Hong Kong market, to US$3.1 million for 2019, and a US$2.1 million increase in promotional and advertisement services, to US$2.2 million for 2019, and an US$0.6 million increase of ADR fee earned from depositary bank due to our offering. Operating cost and expensesTotal operating cost and expenses decreased by 19.5% from US$80.5 million in 2018 to US$64.7 million in 2019, due to significant decreases inshare-based compensation expense and marketing and branding expense.Execution and clearing. Execution and clearing expenses increased by 879.8% from US$0.3 million in 2018 to US$2.5 million in 2019. This increase was primarily due to the significant increase of trading volume on our consolidated accounts, which resulted in increased commissions we paid to Interactive Brokers as execution and clearing fees.Employee compensation and benefits. Employee compensation and benefits expenses decreased by 35.7% from US$55.7 million in 2018 to US$35.8 million in 2019. This decrease was primarily due to a one-time share-based compensation expense of US$32.4 million in 2018. Excluding this one-time expense, employee compensation and benefits increased from US$23.3 million to US$35.8 million, an increase of 53.6% due to the headcount increase of 49.0% compared to 2018.Occupancy, depreciation and amortization. Occupancy, depreciation and amortization expenses increased by 36.3% from US$2.6 million in 2018 to US$3.6 million in 2019, primarily due to an increase in the expanded oversea office space and the relevant leasehold improvements.Communication and market data. Communication and market data expenses increased by 82.5% from US$3.6 million in 2018 to US$6.5 million in 2019. This increase was primarily due to an increase in the fees we paid to stock exchanges to purchase communication and market data as a result of the significant growth of our business.Marketing and branding. Marketing and branding expenses decreased by 32.5% from US$10.5 million in 2018 to US$7.1 million in 2019. This decrease was due to optimization of our marketing strategies and decrease in spending on the referral services provided by third party platforms. General and administrative. General and administrative expenses increased by 18.2% from US$7.8 million in 2018 to US$9.3 million in 2019. This increase was primarily due to business expansion and more professional services.  Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 105 of 194 Table of Contents104Loss before income taxesWe had a loss before income taxes of US$9.3 million in 2019, compared with a loss before income taxes of US$46.2 million in 2018. We had anegative operating margin of 139.7% in 2018 and our negative operating margin improved to 18.6% in 2019, primarily due to the increase in totalrevenues and decrease in total operating costs and expenses in 2019.Income tax benefitsIncome tax benefits increased by 79.1% from US$1.9 million in 2018 to US$3.4 million in 2019, primarily due to the increase in deferred taxassets relating to the operating losses.Net lossAs a result of the foregoing factors, net loss decreased by 86.6% from US$44.3 million in 2018 to US$5.9 million in 2019.Non-GAAP net loss, which excluded share-based compensation and impairment loss from equity investments, was US$1.1 million in 2019, ascompared to a US$10.1 million non-GAAP net loss in 2018. See “Non-GAAP Financial Measures” for more information. See Item 5.A “OperatingResults - Non-GAAP Reconciliations”.InflationTo date, inflation in New Zealand and China has not materially impacted our results of operations. According to the Statistics New Zealand, theaverage year-over-year percent change in the consumer price index was an increase of 1.7% for December 2019 and an increase of 1.6% forDecember 2020. According to the National Bureau of Statistics of China, the year-over-year percent change in the consumer price index was anincrease of 2.8% for December 2019 and an increase of 0.2% for December 2020. Although we have not been materially affected by inflation inthe past, we may be affected by higher rates of inflation in New Zealand, China and any other jurisdiction where we operate in the future.Foreign Currency FluctuationsSubstantially all of our revenues are denominated in U.S. dollars and Hong Kong dollars and our expenses are denominated in Renminbi and U.S.dollars. We have not used any derivative financial instruments to hedge exposure to such risk. Although our exposure to foreign exchange risksshould be limited in general, our results of operations and financial condition will be affected by the exchange rate between U.S. dollar and HongKong dollar as well as between U.S. dollar and Renminbi because a substantial portion of our operating costs and expenses is effectivelydenominated in Renminbi, while our ADSs will be traded in U.S. dollars. We may seek to reduce the currency risk by entering into foreigncurrency instruments. We did not have any currency hedging instruments as of December 31, 2018, 2019 and 2020, however management monitorsmovements in exchange rates closely. Also see Item 3.D “Risk Factors” and Item 11 “Quantitative and Qualitative Disclosures About MarketRisk.”B. Liquidity and Capital ResourcesTiger Brokers (NZ) Limited must comply with the NZX’s capital adequacy requirements, by which its current financial health is measured byassessing our liquidity against the risks it is exposed to. At all times Tiger Brokers (NZ) Limited must maintain its net tangible current assets, or theNTCA, at a level equal to, or greater than, the prescribed minimum capital adequacy, or the PMCA, which shall be the higher of: (i) the minimumNTCA of NZ$0.5 million and (ii) the total risk requirement, or the TRR. At the end of each business day we calculate and record (i) the NTCA;(ii) the TRR; and (iii) the surplus and ratio that the NTCA over the PMCA. In connection with the increasing number and balance of consolidatedaccounts, cash—segregated for regulatory purpose will increase because we expect to set aside a much larger amounts of cash to satisfy the capitaladequacy requirements pursuant to NZX and the cash from our consolidated account customers will also increase. See Note 2 to our auditedconsolidated financial statements. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 106 of 194 Table of Contents105US Tiger Securities, Inc. and Marsco Investment Corporation must comply with the SEC’s net capital requirements, by which its current financialhealth is measured by assessing its liquidity against the risks where it has exposure. At all times US Tiger Securities, Inc. and Marsco InvestmentCorporation must maintain the net capital requirements, at a level equal to, or greater than, the prescribed minimum capital. US TigerSecurities, Inc. must maintain a minimum net capital requirement in compliance with the SEC Rule 15c3-1 as well as comply with the SECRule 17a-11 and the “early warning levels” for net capital requirements contained therein.Tiger Brokers (Singapore) Pte Ltd (“Tiger Brokers SG”) is a capital markets services license holder under the Securities and Futures Act, Chapter289 of Singapore (the “SFA”) for (I) dealing in capital markets products that are securities, collective investment schemes, and exchange-tradedderivatives contracts; (II) product financing; and (III) providing custodial services, and an exempt financial adviser under the Financial AdvisersAct, Chapter 110 of Singapore (the FAA) for advising on investment products and issuing or promulgating analyses/reports on investment productsthat are securities, collective investment schemes, and exchange-traded derivatives contracts. It is also currently in the process of applying for alicence under the Payment Services Act 2019, has not commenced any business in any “payment services” as defined under that Act. It is subject toregulation by the Monetary Authority of Singapore (“MAS”). Under the SFA, there is a requirement to maintain sufficient capital (“CAR”) as partof its condition to operate the business in Singapore. CAR is calculated using a risk-based capital approach. For Tiger Brokers SG, the minimumbase capital requirement is SGD 1 million and, in addition, the firm is required to analyze its operational risk and determine further capitalrequirement according to the risk the business faces. Its financial resources (which definition includes its base capital) cannot fall below its totalrisk requirement (i.e. the amount required to address risks arising from its activities), and in the case that its financial resources fall below 120% ofits total risk requirement, it is required to immediately notify the MAS of this fact.Cash flows and working capitalTo date, other than as described below, we have financed our operations primarily through cash provided by financing activities and our brokerageoperations, and we expect to continue to do so through 2021, though we cannot guarantee that we will not require or seek external sources offinancing during that time.As of December 31, 2020, a majority of our cash and cash equivalents were denominated in U.S. dollars and Renminbi. We had US$79.7 million incash and cash equivalents as of December 31, 2020. Our cash and cash equivalents consist of cash on hand, bank deposits and cash equivalents that(i) are highly liquid, (ii) have original maturities of three months or less and (iii) are unrestricted as to withdrawal or use.In February 2021, we completed a financing transaction in which a group of investors led by an affiliate of Xiaomi Corporation purchasedconvertible notes in an aggregate principal amount of US$65 million through a private placement. The convertible notes will mature in 2026 unlesspreviously converted.In April 2021, we completed a financing transaction in which a group of investors purchased convertible notes in an aggregate principal amount ofUS$90 million through a private placement. The convertible notes will mature in 2026 unless previously converted.We believe our cash on hand, bank deposits and cash equivalents will be sufficient to meet our current and anticipated needs for general corporatepurposes for our present requirements. We may decide to enhance our liquidity position or increase our cash reserve through additional capital andfinance funding. The issuance and sale of additional equity would result in further dilution to our shareholders. The incurrence of indebtednesswould result in increased fixed obligations and could result in operating covenants that would restrict our operations.From time to time, we may make additional capital contributions to our PRC subsidiaries, establish new PRC subsidiaries or controlled affiliatesand make capital contributions or other payments to these new PRC subsidiaries or controlled affiliates, make loans to our PRC subsidiaries orcontrolled affiliates, or acquire offshore entities with business activities in China in offshore transactions. However, most of these uses are subjectto PRC regulations and approvals. For example:●capital contributions to our PRC subsidiaries or controlled affiliates must be approved by the MOFCOM or its local branches; and Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 107 of 194 Table of Contents106●loans by us to our PRC subsidiaries or controlled affiliates to finance their activities cannot exceed statutory limits and must be registeredwith the SAFE or its local branches.See “Regulation—PRC Regulations Relating to Foreign Exchange.”Substantially all of our revenues are in U.S. dollars and Hong Kong dollars while substantially all of our expenses are in Renminbi andU.S. dollars. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest paymentsand trade and service-related foreign exchange transactions, can be made in foreign currencies without the prior SAFE approval as long as certainroutine procedural requirements are fulfilled. Therefore, our PRC subsidiaries are allowed to pay dividends in foreign currencies to us without theprior SAFE approval by following certain routine procedural requirements. However, approval from or registration with competent governmentauthorities is required where Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as therepayment of loans denominated in foreign currencies. The PRC government may at its discretion restrict access to foreign currencies for currentaccount transactions in the future.The following table sets forth a summary of our cash flows for the periods presented:For the years endedDecember 31, 2018 2019 2020 US$ (in thousands)Summary Consolidated Statement of Cash Flows Data: Net cash (used in)/provided by operating activities (21,172) 243,309 535,281Net cash (used in)/provided by investing activities (35,124) (22,040) 43,556Net cash provided by/(used in) financing activities 79,526 114,907 (8,366)Increase in cash and cash equivalents and restricted cash 23,230 336,176 570,471Effect of exchange rate changes (189) 46 (195)Cash, cash equivalents and restricted cash at beginning of the year 18,061 41,102 377,324Cash, cash equivalents and restricted cash at end of the year 41,102 377,324 947,600Operating ActivitiesNet cash provided by operating activities in 2020 was US$535.3 million, as compared to net income of US$19.2 million in 2020. The differencewas primarily attributable to (i) an increase of US$602.5 million in receivables from brokers, dealers and clearing organizations, (ii) an increase ofUS$266.2 million in receivables from customers, and (iii) an increase of US$3.5 million in prepaid expenses and other current assets. This waspositively impacted by (i) an increase of US$1,183.7 million in amounts payables to customers(ii) an increase of US$168.6 million in payables tobrokers, dealers and clearing organizations,(iii) a decrease of US$14.3 million in financial instruments held at fair value.(iv) an increase ofUS$10.3 million in accrued expenses and other current liabilities due to the increased payroll and welfare, tax payables, and marketing andprofessional expenses in connection with the expansion of our business, and (v) the US$6.1 million recognized share-based compensation expensesresulting from the options granted to the management and employees.Net cash provided by operating activities in 2019 was US$243.3 million, as compared to net loss of US$5.9 million in 2019. The difference wasprimarily attributable to (i) an increase of US$183.1 million in amounts receivables from brokers, dealers and clearing organizations, primarilyrepresenting the receivables of US$175.4 million from Interactive Brokers, (ii) an increase of US$101.4 million in receivables from customers,(iii) US$6.2 million in deferred income tax relating to our operating loss, (iv) an increase of US$1.3 million in prepaid expenses and other currentassets, and (v) an increase of US$6.6 million in financial instruments held at fair value. This was positively impacted by (i) an increase ofUS$481.1million in payables to customers, primarily due to the increase of customers’ deposits into our consolidated accounts, (ii) an increase ofUS$55.1 million in amounts payables to brokers, dealers and clearing organizations which are primarily from Interactive Brokers, (iii) an increaseof US$6.2 million in accrued expenses and other current liabilities due to the increased payroll and welfare, tax payables, and marketing andprofessional expenses in connection with the expansion of our business, and (iv) the US$4.1 million recognized share-based compensationexpenses resulting from the options granted to the management and employees. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 108 of 194 Table of Contents107Net cash used in operating activities in 2018 was US$21.2 million, as compared to net loss of US$44.3 million in 2018. The difference wasprimarily attributable to (i) an increase of US$10.4 million in amounts due from related parties, primarily representing the receivables of US$9.6million from Interactive Brokers, (ii) an increase of US$6.2 million in financial instruments held at fair value,(iii) an increase of US$2.3 million inprepaid expenses and other current assets, (iv) US$1.9 million in deferred income tax relating toour operating loss, and (v) an increase of US$1.3million in other non-current assets. This was positively impacted by (i) the US$34.2million recognized share-based compensation expensesresulting from the options granted to the management and employees, (ii) anincrease of US$5.3 million in payables to customers, primarily due tothe increase of customers’ deposits into our consolidated accounts, (iii) an increase of US$5.1 million in accrued expenses and other currentliabilities due to the increased payroll and welfare, rental payable and marketing and branding expenses in connection with the expansion of ourbusiness, and (iv) a decrease of US$1.1 million in receivables from brokers, dealers and clearing organizations.Investing ActivitiesNet cash provided by investing activities in 2020 was US$43.6 million, consisting primarily of maturity of term deposits US$78.4 million partiallyoffset by the purchase of term deposits and loans to employees.Net cash used in investing activities in 2019 was US$22.0 million, consisting primarily of (i) purchase of term deposits US$65.6 million, (ii) cashpaid for acquisition of a subsidiary Marsco, net of cash acquired of US$6.0 million, (iii) US$1.3 million of purchase for property, equipment andintangible assets, and US$1.5 million of payment for long-term investments and prepayment for acquisition and long-term investments subject tocertain closing conditions, and (iv) loan provided to employees and related parties of US$1.4 million, partially offset by US$30.0 million ofmaturity of term deposits and US$22.1 million of cash-segregated for regulatory purpose received from acquisition of Marsco.Net cash used in investing activities in 2018 was US$35.1 million, consisting primarily of US$30.0 million in purchase of term deposits, US$5.2million in loans to related parties and US$1.7 million of purchase for property, equipment and intangible assets, partially offset by US$1.8 millionof repayment of loans from related parties.Financing ActivitiesNet cash used in financing activities in 2020 was US$8.4 million, consisting primarily of US$10.5 million in payment to redeemable non-controlling interest due to the disposal of our sponsored fund.Net cash provided by financing activities in 2019 was US$114.9 million, consisting primarily of net proceeds of US$114.8 from initial publicoffering and proceeds of US$0.8 million from Series C preferred shares subscription received, partially offset by US$1.1 million repayment of loanto bank.Net cash provided by financing activities in 2018 was US$79.5 million, consisting primarily of proceeds from issuance of Class A and Class Bordinary shares and Series B-3, Series C and Series C-1 preferred shares.Capital ExpendituresOur capital expenditures were primarily incurred for purchases of servers, equipment and software. Historically, the amount of our capitalexpenditures has been small. Our capital expenditures were US$1.7 million, US$1.3 million and US$1.0 million in 2018, 2019 and 2020,respectively. We intend to fund our future capital expenditures with our existing cash balance. We will continue to incur capital expenditures asneeded to meet the expected growth of our business.Holding Company StructureUP Fintech is a holding company with no material operations of its own. We conduct our operations primarily through our New Zealandsubsidiaries, U.S. subsidiaries and our VIEs and their respective subsidiaries in China. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 109 of 194 Table of Contents108As a result, UP Fintech’s ability to pay dividends may depend upon dividends paid by our PRC and New Zealand subsidiaries. If our existing PRCor New Zealand subsidiaries or any newly formed ones incur debt on their own behalf in the future, the instruments governing their debt mayrestrict their ability to pay dividends to us. In addition, our wholly foreign-owned subsidiaries in China are permitted to pay dividends to us onlyout of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Under PRC law, each of oursubsidiaries and VIEs in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund certain statutory reserve fundsuntil such reserve funds reach 50% of its registered capital. In addition, any of our wholly foreign-owned subsidiaries in China may allocate aportion of its after-tax profits based on PRC accounting standards to enterprise expansion funds and staff bonus and welfare funds at its discretion,and our VIEs may allocate a portion of their after-tax profits based on PRC accounting standards to discretionary surplus funds at their discretion.The statutory reserve funds and the discretionary funds are not distributable as cash dividends. Furthermore, the PRC tax authorities may requireour subsidiaries to adjust its taxable income under the contractual arrangements it currently has in place with our VIEs in a manner that wouldmaterially and adversely affect their ability to pay dividends and other distributions to us. Remittance of dividends by a wholly foreign-ownedcompany out of China is subject to examination by the banks designated by SAFE. Our PRC subsidiaries have not paid dividends and will not beable to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds.Dividend distributions from our U.S. subsidiaries will be subject to U.S. withholding tax. However, our U.S. subsidiaries have not paid dividendsin the past and we have no plans for our U.S. subsidiaries to pay dividends in the foreseeable future.Under New Zealand law, our New Zealand subsidiaries may authorize a distribution, including a dividend, at a time, and of any amount, and to anyshareholder they think fit, provided that the solvency test and any relevant conditions contained in the New Zealand subsidiaries’ constitution aresatisfied. Each of our New Zealand subsidiaries satisfies the solvency test if it is able to pay its debts as they become due in the normal course ofbusiness and the value of its assets is greater than the value of its liabilities, including contingent liabilities. The subsidiary’s directors who vote infavor of a dividend must sign a certificate stating that, in their opinion, it will, immediately after the distribution, satisfy the solvency test and thegrounds for that opinion. The board must not authorize a dividend in respect of some but not all the shares in a class, or that is of a greater value pershare in respect of some shares of a class than it is in respect of other shares of that class, unless the amount of the dividend in respect of a share ofthat class is in proportion to the amount paid to the company in satisfaction of the liability of the shareholder under the subsidiary’s constitution orunder the terms of issue of the share or is required, for a portfolio tax rate entity, as a result of sub-part HM of the Income Tax Act 2007.C. Research and DevelopmentOur research and development expenses primarily consist of salaries and employee benefits, rental, and depreciation expenses related to thedevelopment of our proprietary trading platform, back-end technology and customer relationship management system. For the years endedDecember 31, 2018, 2019 and 2020, US$11.3 million, US$18.0 million and US$22.5 million of research and development costs have beenexpensed as incurred as the costs qualifying for capitalization have been insignificant.D. Trend InformationPlease refer to our disclosures set forth under Item 3.D “Risk Factors,” Item 4 “Information on the Company,” and elsewhere in this Item 5“Operating and Financial Review and Prospects” for information regarding the material risks, business developments and strategies, factors, andtrends that are most likely to affect our business and results of operations through 2020. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 110 of 194 Table of Contents109E. Off-Balance Sheet Commitments and ArrangementsWe have entered into various off-balance sheet arrangements in the ordinary course of business, primarily to meet the needs of our clients. Thesearrangements include the margin financing and borrowing agreements. Clients with margin loans have agreed to allow the Company to pledgecollateralized securities in their brokerage accounts, which is generally equal to or in excess of the margin loan. Securities borrowing transactionsrequire the Company to deposit cash with the lender. The cash collateral received from customers for securities borrowings are generally in excessof the market value of the securities borrowed from other brokers. Increases in security prices may cause the fair value of the securities loaned toexceed the amount of cash received as collateral. In the event the customer to these transactions does not return the loaned securities or provideadditional cash collateral, we may be exposed to the risk of acquiring the securities at prevailing market prices in order to satisfy our clientobligations. The Company monitors required margin and collateral level on a daily basis in compliance with regulatory and internal guidelines andcontrols its risk exposure through financial, credit, legal reporting system. Under applicable agreements, customers are required to depositadditional collateral or reduce holding positions, when necessary to avoid forced liquidation of their positions. See Note 16 to our financialstatements for more information regarding the collateralized transactions.Additionally, we have also entered into capital commitments as part of transactions in the ordinary course of business. See Capital commitments inF. Tabular Disclosure of Contractual Obligations for more information. We do not have any variable interest in any unconsolidated entity thatprovides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or product development services with us.F. Tabular Disclosure of Contractual ObligationsYears ending December 31:More thanUS$ (in thousands) Total Less 1 year 1-3 Years 3-5 Years 5 YearsOperating lease commitments 7,747 3,525 3,083 655 484Capital commitments 1,078 1,078 — — —Our capital commitment relates to commitments of a sale and purchase agreement to acquire 100% equity interest of a company located in HongKong in a total consideration of US$1,540,555 (HK$12,000,000). As of December 31, 2020, the acquisition is not closed, and the capitalcommitment contracted but not paid was US$1,078,389 (HK$8,400,000). Refer to Note 17 — Commitment and Contingency to our auditedfinancial statement for more information.G. Safe HarborPlease refer to our disclosure at the front of this report under the heading “Forward-Looking Statements.”Item 6. Directors, Senior Management, and EmployeesA. Directors and Senior ManagementThe following table sets forth information regarding our directors and executive officers as of the date of this report.Directors and Executive Officers Age Position/TitleTianhua Wu 36 Chief Executive Officer and DirectorJohn Fei Zeng 41 Chief Financial OfficerKatherine Wei Wu 48 Chief Compliance OfficerLei Fang 33 DirectorDavid Eric Friedland 57 DirectorXin Fan 42 Independent directorJian Liu 49 Independent directorXian Wang 53 Independent directorLei Huang 49 Director Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 111 of 194 Table of Contents110Mr. Tianhua Wu has served as our Chief Executive Officer, or CEO, and director since January 2018. Mr. Wu is the founder and CEO of BeijingRongke since June 2014. Between 2005 and 2014, Mr. Wu served at Youdao of NetEase Inc., where he was responsible for core search. Mr. Wu hasreceived many honors in the business world. He was awarded “Entrepreneurial Elite under 35” in 2016 and “40 Business Elites under 40 in China”in 2017. He currently serves as a director for Ningxia Haozhong Management Consulting Center LLP and Beijing Yian Management &Consulting Co., Ltd. Mr. Wu obtained both bachelor’s and master’s degrees in computer science and technology from Tsinghua University.Mr. John Fei Zeng has served as our Chief Financial Officer since October 2018. Between 2010 and 2012, Mr. Zeng worked at the equity salesteam of CICC. Between 2012 and 2015, he worked as a Director at UBS Global Capital Market. From 2015 to 2018, he served as an ExecutiveDirector in Equity Capital Markets (ECM) at Goldman Sachs, where he was the ECM captain for China fintech and healthcare sectors. Mr. Zengobtained a B.S. degree in business administration from the University of Southern California and a MBA from New York University.Ms. Katherine Wei Wu has served as our Chief Compliance Officer since April 2019. Ms. Wu has over 20 years of experience in compliance atvarious international financial institutions. Ms. Wu served as Executive Director in Compliance at Haitong International from February 2016 toFebruary 2019. She served as Executive Director in Compliance at Mitsubishi UFJ Securities (USA), Inc. from August 2010 to January 2016.Ms. Wu obtained her Juris Doctor degree from Fordham University School of Law and Bachelor of Arts (B.A.) degree in Economics from MountHolyoke College.Mr. Lei Fang has served as our director since June 2018. Mr. Fang has served as a vice president of Beijing Rongke since 2016. Before joining us,he worked as regional sales director at Guosen Securities Co., Ltd.’s Beijing Branch from 2007 to 2011, as well as director of business managementcenter and general manager of Majiapu business department from 2012 to 2015. Mr. Lei Fang received his bachelor’s degree in internationalbusiness from China Institute of Defense Science and Technology.Mr. David Eric Friedland has served as our director since June 2018. Mr. Friedland is the regional head and managing director of InteractiveBrokers Group’s Asia Pacific operations. Mr. Friedland’s tenure with Interactive Brokers Group dates back to 1985 where he assisted with theprogramming and development of its trading systems. In 1995, Mr. Friedland relocated to Hong Kong to oversee and commence the group’sderivative market making and brokerage operations in Asia and Australia. Mr. Friedland received his bachelor’s degree in economics from VassarCollege, cum laude, and an MBA from the Anderson Graduate School of Management at UCLA.Mr. Xin Fan has served as a director of the Company since our initial public offering. Mr. Fan has served as chief financial officer of Bilibili Inc.since September 2017. Mr. Fan currently also serves as an independent director of GSX Techedu Inc. (NYSE: GSX). Prior to that, Mr. Fan servedas vice president of finance of Bilibili Inc. since April 2016. Before joining Bilibili Inc., Mr. Fan served as a finance director at NetEase (Nasdaq:NTES) from 2011 to 2016. Prior to 2011, Mr. Fan held various positions at KPMG Huazhen for an aggregate of eight years and served as a seniormanager there from 2008 to 2011. Mr. Fan received his bachelor’s degree in international accounting from Shanghai University of Finance andEconomics in 2001. Mr. Fan is a regular member of the American Institute of Certified Public Accountants and a certified public accountant inChina. He also holds licenses as chartered global management accountant and chartered certified accountant in the United Kingdom.Mr. Jian Liu has served as a director of the Company since our initial public offering. Since 2017, Mr. Liu has served as the Assistant Dean of theInstitute of Financial Technology of Tsinghua University and the Deputy Director of Sunshine Internet Finance Innovation Research Center. Priorto that, Mr. Liu served as a general manager, vice president and partner of the investment banking division of Hejun Group Co., Ltd., formerlyknown as Beijing Hejun Venture Advising Co. Ltd., a managing director of Guangzhou Pingjia Brothers Enterprise InvestmentManagement Co., Ltd., a managing director of Huaxia Keystone Financial Consulting Co., Ltd., and a director of Guangdong Hengxing Group.Mr. Liu received an EMBA degree from the School of Economics and Management of Tsinghua University and a bachelor’s degree in law fromXiamen University.Ms. Xian Wang has served as a director of the Company since our initial public offering. Since August 2016, Ms. Wang has worked at the NationalInstitute of Finance at Tsinghua University. Prior to that, Ms. Wang served as a deputy director general at China Securities RegulatoryCommissions. Ms. Wang received her doctorate degree in economics from Graduate School of Economics, Chinese Academy of Social Sciences. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 112 of 194 Table of Contents111Mr. Lei Huang has served as a director of the Company since November 2020. He received his Master's degree in Global Financial Analysis fromBentley University. He now serves as chief executive officer of our subsidiary US Tiger Securities, Inc; previously he has served as chief executiveofficer of Haitong Securities USA LLC, chief compliance officer & option manager of CICC US Securities, Inc, and regulatory supervisor of theNational Association of Securities Dealers.There are no familial relationships among any of the Company’s directors or senior managers set forth above. There are no agreements orunderstanding between the directors and members of senior management and any of our major shareholders, customers, suppliers or other personspursuant to which such directors and members of senior management were selected as directors or members of senior management.B. CompensationCompensation of Directors and Executive OfficersIn 2020, we paid an aggregate of RMB0.8 million (US$0.1 million), HKD2.4 million (US$0.3 million) in cash to our executive officers, andRMB0.8 million (US$0.1 million) and US$0.4 million to our non-executive directors. We have not set aside or accrued any amount to providepension, retirement or other similar benefits to our directors and executive officers. Our PRC, New Zealand, U.S., Singapore and Hong Kongsubsidiaries and our PRC VIEs are required by law to make contributions equal to certain percentages of each employee’s salary for his or herpension insurance, medical insurance, unemployment insurance and other statutory benefits and a housing provident fund. New Zealand has astatutory retirement savings scheme, Kiwisaver, in which New Zealand employees may participate.2018 Share Incentive PlanIn June 2018, our board of directors approved the UP Fintech Holding Limited Share Incentive Plan, or the 2018 Share Incentive Plan, to attractand retain the best available personnel, provide additional incentives to employees, directors and consultants, and promote the success of ourbusiness.The 2018 Share Incentive Plan consists of a share incentive plan for our service providers. The original maximum aggregate number of Class Aordinary shares that could be issued pursuant to all awards under the 2018 Share Incentive Plan was 187,697,314 Class A ordinary shares, whichwas increased to 254,697,314 Class A ordinary shares by the amendment thereto in December 2018. As of the date of March 31,2021, options topurchase 198,480,744 and 55,027,364 Class A ordinary shares have been granted and are outstanding and 78,898,512 and 71,436,510 restrictedshare units, excluding awards that were forfeited or cancelled after the relevant grant dates.2019 Performance Incentive PlanIn March 2019, we implemented the 2019 Performance Incentive Plan (the “2019 Plan”), or the 2019 Performance Incentive Plan, which wasapproved by our board of directors to grant a maximum number of 52,000,000 ordinary shares under the 2019 Plan, to attract and retain the bestavailable personnel, provide additional incentives to employees, directors and consultants, and promote the success of our business. In December2020, the Company’s board of directors approved amendments to the 2019 Plan adding an additional 10,429,305 ordinary shares for issuance underthe 2019 Plan which was obtained through the Company’s share buyback plan.The 2019 Performance Incentive Plan consists of a share incentive plan for our service providers. The maximum aggregate number of Class Aordinary shares that could be issued pursuant to all awards under the 2019 Performance Incentive Plan and 2018 Share Incentive Plan was265,126,619. As of the date of March 31, 2021, 55,027,364 Class A ordinary shares are outstanding and 71,436,510 restricted share units,excluding awards that were forfeited or cancelled after the relevant grant dates.The following paragraphs describe the principal terms of the 2019 Performance Incentive Plan.Types of Awards. The 2019 Performance Incentive Plan permits the awards of options, share appreciation rights, restricted shares or any other typeof awards approved by the plan administer. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 113 of 194 Table of Contents112Plan Administration. The 2019 Performance Incentive Plan will be administered by our board of directors, or one or more committees, within itsdelegated authority, appointed by the board of directors as the case may be. The committee(s) or the full board of directors will determine all or apart of the matters related to the 2019 Performance Incentive Plan, including but not limited to: the participants to receive awards, the form, typeand number of awards to be granted to each participant, and the terms and conditions of each award grant.Award Agreement. Awards granted under the 2019 Performance Incentive Plan are evidenced by an award agreement in writing, approved by theplan administrator, setting forth the terms of an award that has been duly authorized and approved.Eligibility. We may grant awards to our directors, officers, employees, consultants and other eligible persons.Vesting Schedule. In general, the plan administrator at its sole discretion determines the vesting schedule, which is specified in the relevant awardagreement.Exercise of Options. The plan administrator at its sole discretion determines the exercise price for each award, which is stated in the relevant awardagreement.Transfer Restrictions. Awards may not be transferred in any manner by the participant other than in accordance with the exceptions provided in the2019 Performance Incentive Plan or the relevant award agreement or otherwise determined by the plan administrator, such as transfers by will orthe laws of descent and distribution.Termination and Amendment of the 2019 Performance Incentive Plan. Unless terminated earlier, the 2019 Performance Incentive Plan has a term often years. Our board of directors has the authority to amend or terminate the plan. However, no such action may adversely affect in any materialway any awards previously granted unless agreed by the recipient. Class A Ordinary SharesExerciseUnderlyingPrice orOutstandingPurchase PriceDate ofDate ofNameAwards(US$/Share)GrantExpirationKatherine Wei Wu * December 11, 2019 December 10, 2029 Lei Fang US$0.00001 October 1, 2015 September 30, 2025US$0.00001 January 4, 2016 January 3, 2026US$0.00001 April 1, 2016 March 31, 2026US$0.0001 October 1, 2018 September 30, 2028*US$0.20000 January 1, 2019 December 31, 2028 Lei Huang * May 1, 2020 April 30, 2029 Total 8,944,744 * Less than 1% of our total outstanding Class A ordinary shares.Employment Agreements and Indemnification AgreementsWe have entered into employment agreements with each of our executive officers. The current term of these employment agreements will be untilthe next shareholders meeting, unless terminated earlier pursuant to the provisions thereof, and these agreements will be automatically extended forsuccessive periods of 12 months each subject to the provisions thereof. We may terminate employment for cause, for certain acts of the executiveofficer, such as conviction or plea of guilty to a felony or any crime involving moral turpitude, or a continued failure to perform agreed duties. Wemay also terminate an executive officer’s employment without cause upon 60-day prior written notice. In such case of termination by us, we willprovide severance payments and other compensation to the executive officer as expressly required by applicable laws and these employmentagreements. The executive officer may resign at any time with a 60-day prior written notice. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 114 of 194 Table of Contents113C. Board PracticesBoard of DirectorsOur board of directors consist of seven directors. A director is not required to hold any shares in our company to qualify to serve as a director. Adirector may vote with respect to any contract, proposed contract, or arrangement in which he or she is materially interested. A director mayexercise all the powers of our company to borrow money, mortgage its business, property and uncalled capital and issue debentures or othersecurities whenever money is borrowed or as security for any obligation of our company or of any third party. We have also entered intoindemnification agreements with each of our directors and executive officers. Under these agreements, we agree to indemnify our directors andexecutive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being adirector or officer of our company.Committees of the Board of DirectorsThe Company’s board of directors has three committees: an audit committee, a compensation committee and a nominating and corporategovernance committee. Charters have been adopted for each committee. Each committee’s members and functions are described below.Audit Committee. Our audit committee consists of Mr. Xin Fan, Mr. Jian Liu and Ms. Xian Wang. Mr. Xin Fan is the chairman of our auditcommittee. We have determined that Mr. Xin Fan, Mr. Jian Liu and Ms. Xian Wang satisfy the “independence” requirements of Rule 5605(c)(2) ofthe Listing Rules of The Nasdaq Stock Market LLC and Rule 10A-3 under the Exchange Act. We have determined that Mr. Xin Fan qualifies as an“audit committee financial expert.” The audit committee oversees our accounting and financial reporting processes and the audits of the financialstatements of our company. The audit committee is responsible for, among other things:●appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by theindependent auditors;●reviewing with the independent auditors any audit problems or difficulties and management’s response;●discussing the annual audited financial statements with management and the independent auditors;●reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitorand control major financial risk exposures;●reviewing and approving all proposed related party transactions;●meeting separately and periodically with management and the independent auditors; and●monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of ourprocedures to ensure proper compliance.Compensation Committee. Our compensation committee consists of Mr. Tianhua Wu, Mr. Lei Huang and Mr. Lei Fang. Mr. Tianhua Wu is thechairman of our compensation committee. The compensation committee assists the board in reviewing and approving the compensation structure,including all forms of compensation, relating to our directors and executive officers. Our CEO may not be present at any committee meeting duringwhich his compensation is deliberated. The compensation committee is responsible for, among other things:●reviewing and approving, or recommending to the board for its approval, the compensation for our CEO and other executive officers;●reviewing and recommending to the board for determination with respect to the compensation of our non-employee directors; Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 115 of 194 Table of Contents114●reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements; and●selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’sindependence from management.Nominating and Corporate Governance Committee. Our nominating and corporate governance committee consists of Mr. Tianhua Wu, Mr. LeiHuang and Mr. Lei Fang. Mr. Tianhua Wu is the chairman of our nominating and corporate governance committee. The nominating and corporategovernance committee assists the board of directors in selecting individuals qualified to become our directors and in determining the compositionof the board and its committees. The nominating and corporate governance committee is responsible for, among other things:●selecting and recommending to the board nominees for election by the shareholders or appointment by the board;●reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge,skills, experience and diversity;●making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of theboard; and●advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as ourcompliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance andon any remedial action to be taken.Duties of DirectorsUnder Cayman Islands law, our directors owe fiduciary duties to our company, including a duty of loyalty, a duty to act honestly, and a duty to actin what they consider in good faith to be in our best interests. Our directors must also exercise their powers only for a proper purpose. Our directorsalso have a duty to exercise the care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfillingtheir duty of care to us, our directors must ensure compliance with our memorandum and articles of association, as amended and restated from timeto time, and the class rights vested thereunder in the holders of the shares. In certain limited exceptional circumstances, a shareholder may have theright to seek damages in our name if a duty owed by our directors is breached.Our board of directors has all the powers necessary for managing, and for directing and supervising, our business affairs. The functions and powersof our board of directors include, among others:●convening shareholders’ annual and extraordinary general meetings;●declaring dividends and distributions;●appointing officers and determining the term of office of the officers;●exercising the borrowing powers of our company and mortgaging the property of our company; and●approving the transfer of shares in our company, including the registration of such shares in our share register. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 116 of 194 Table of Contents115Terms of Directors and OfficersOur officers are elected by and serve at the discretion of the board of directors. Our directors are not subject to a term of office and will hold officeuntil such time as they are removed from office by ordinary resolution of the shareholders or by the board. A director will be removed from officeautomatically if, among other things, the director (i) becomes bankrupt or makes any arrangement or composition with his creditors; or (ii) is foundby our company to be or becomes of unsound mind. See Item 6.A “Directors and Senior Management” for additional information about our currentdirectors and Item 7.B “Related Party Transactions” for additional information about employment agreements for our executive officers.D. EmployeesWe had 446 and 650 employees as of December 31, 2018 and 2019 respectively. As of December 31, 2020, we had 785 employees, 693 based inmainland China and Hong Kong. Below is a breakdown of employees by their departments as of December 31, 2020. Number of Department employees % of total Research and development and technology 274 34.9%Compliance, legal and finance 78 10.0%Business and customer support 279 35.5%Marketing 20 2.5%Operations 39 5.0%General and administration 95 12.1%Total 785 100.0%We enter into individual employment contracts with selected employees to cover matters including non-competition and confidentialityarrangements. We generally formulate our employees’ remuneration package to include salary and benefits. We provide our employees with socialsecurity benefits in accordance with all applicable regulations and internal policies.E. Share OwnershipThe following table sets forth information with respect to the beneficial ownership, within the meaning of rules and regulations of the SEC, of ourordinary shares, on a fully diluted and as-converted basis, as of March 31, 2021, by:●each of our directors and executive officers; and●each person known to us to own beneficially more than 5% of our ordinary shares. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 117 of 194 Table of Contents116Beneficial ownership includes the power to direct the voting or the disposition of the securities or to receive the economic benefit of ownership ofthe securities. Except as indicated below, and subject to applicable community property laws, the persons named in the table have the sole power todirect the voting or the disposition of the ordinary shares or to receive the economic benefit of ownership of the ordinary shares shown asbeneficially owned by them. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, wehave included shares that the person has the right to acquire within 60 days, including through the exercise of any option, warrant or other right orthe conversion of other securities. These shares, however, are not included in the computation of the percentage ownership of any other person.Total SharesSharesPercentage ADSPercentageClass APercentageClass BPercentageVoting Name Number of Class Number1 of Class Number of Class Power Major Shareholders Xiaomi Corporation2 — — 250,641,392 12.48% — — 3.02%Tigerex Holding Limited3 14,731,128 14.74% 220,966,922 11.00% — — 2.65%IB Global Investments LLC4 — — 150,760,322 7.51% — — 1.81%Directors and Executive Officers Tianhua Wu 2,043,332 2.05% 184,217,417 5 9.17% 315,111,722 6 100% 78.05%John Fei Zeng * * ** — — —Lei Fang7 1,143,333 1.15% ** — — —David Eric Friedland — — — — — — —Katherine Wei Wu * * ** — — —Xin Fan — — — — — — —Jian Liu — — — — — — —Xian Wang — — — — — — —Lei Huang * * ** — — —All directors and executive officers as a group 2,043,332 2.05% 184,217,417 9.17% 315,111,722 100% 78.05%Notes:For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned bysuch person or group by the voting power of all of our Class A and Class B ordinary shares as a single class. Each holder of Class A ordinary sharesis entitled to one vote per share and each holder of our Class B ordinary shares is entitled to twenty votes per share on all matters submitted to themfor a vote. Our Class A ordinary shares and Class B ordinary shares vote together as a single class on all matters submitted to a vote of ourshareholders, except as may otherwise be required by law.* Less than 1% of our total outstanding shares1.The numbers set forth in this column include Class A shares represented by our outstanding ADSs held by each shareholder.2.The information provided with respect to Xiaomi Corporation is derived from a Schedule 13G filed with the SEC by Xiaomi Corporation,People Better Limited, and Fast Pace Limited on February 13, 2020. Xiaomi Corporation, a Cayman Islands company listed on the HongKong Stock Exchange (stock code: 01810), through its wholly-owned BVI company, Fast Pace Limited, holds 100% of the equityinterests in People Better Limited.3.Representing 220,966,922 Class A ordinary shares held by Tigerex Holding Limited, a BVI company. Mr. Binsen Tang, a PRC resident, isa director of, and has the ultimate control in, Tigerex Holding Limited. 220,966,920 Class A ordinary shares were in the form of ADS.4.The information provided with respect to IB Global Investments LLC is derived from a Schedule 13D filed by IB Global InvestmentsLLC, IBG LLC, Interactive Brokers Group, INC., IBG Holdings LLC, IBKR Member Holdings LLC and the Thomas Peterffy 2018Revocable Trust on May 20, 2019. Interactive Brokers Group, Inc., a U.S. company incorporated in Greenwich, Connecticut and listed onThe Nasdaq Stock Market LLC (stock symbol: IBKR), is the managing member of IBG LLC, a U.S. company incorporated inGreenwich, Connecticut. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 118 of 194 Table of Contents1175.Representing (i) 22,500,000 Class A Ordinary Shares held by Sky Fintech Holding Limited, which are beneficially owned by Mr. TianhuaWu through Tiger Family Trust, as further disclosed in Item 6; (ii) 30,649,987 Class A Ordinary Shares issued to participants of the UPFintech Holding Limited Share Incentive Plan and the UP Fintech Holding Limited 2019 Performance Incentive Plan of the Issuer (the“Plans”) by exercise of awards thereof, with the voting rights attached thereto irrevocably entrusted to Mr. Tianhua Wu; (iii) 86,390,885Class A Ordinary Shares held by ARK Trust (Hong Kong) Limited (“ARK Limited”) for the benefit of certain participants of the Plans,with the voting rights attached thereto irrevocably entrusted to Mr. Tianhua Wu; and (iv) 44,676,545 Class A Ordinary Shares acquirableby certain participants of the Plans upon exercise of awards thereof within 60 days after March 31, 2021, which were reserved and notissued to ARK Limited, with the voting rights attached thereto irrevocably entrusted to Mr. Tianhua Wu.6.Represents 315,111,722 Class B Ordinary Shares held by Sky Fintech Holding Limited, which are beneficially owned by Mr. Tianhua Wuthrough Tiger Family Trust. Sky Fintech Holding Limited is indirectly wholly-owned by Lightspeed Rise Holdings Limited, a BVIcompany, through its wholly-owned subsidiary, Sky Tiger Investment Holding Limited, a BVI company. Lightspeed Rise HoldingsLimited is controlled by Tiger Family Trust, a trust established under the laws of Hong Kong and managed by ARK Limited as thetrustee. Mr. Tianhua Wu is the settlor of the Tiger Family Trust and Mr. Tianhua Wu and his family are the trust’s beneficiaries. Under theterms of this trust, Mr. Tianhua Wu has the power to direct the trustee with respect to the retention or disposal of, and the exercise of anyvoting and other rights attached to, the shares held by Sky Fintech Holding Limited in our company.7.Represents 17,149,995 Class A Ordinary Shares in the form of ADSs as of March 31, 2021 issued to Mr. Lei Fang under the UP FintechHolding Limited Share Incentive Plan by exercise of awards thereof, with the voting rights attached thereto irrevocably entrusted to Mr.Tianhua Wu.We have a dual-class share structure. Our outstanding ordinary shares consist of Class A ordinary shares and Class B ordinary shares, andMr. Tianhua Wu and his family beneficially own all of our issued Class B ordinary shares through Sky Fintech Holding Limited, of which he is thedirector, and Mr. Wu, with the voting rights entrusted to him under the 2018 and 2019 Performance Incentive Plan, is able to exercise 78.05% ofthe aggregate voting power of our total issued and outstanding share capital. As such, Mr. Wu is able to control any actions that require shareholderapproval under Cayman Islands law, our memorandum and articles of association, and the Nasdaq requirements. Holders of Class A ordinary sharesand Class B ordinary shares have the same rights except for voting and conversion rights. Each Class A ordinary share is entitled to one vote, and isnot convertible into Class B ordinary share under any circumstance. Each Class B ordinary share is entitled to 20 votes and will be automaticallyconverted into one Class A ordinary share under certain circumstances. Our dual-class ordinary share structure involves certain risks. See Item 3.D“Risk Factors” of this Annual Report on Form 20-F for more information about risks associated with our dual-class share structure.Item 7. Major Shareholders and Related Party TransactionsA. Major ShareholdersSee “Item 6. Directors, Senior Management and Employees—E. Share Ownership.”B. Related Party TransactionsContractual Arrangements with Our VIEs and Their Respective ShareholdersPRC law currently limits foreign equity ownership of companies that provide Internet services and related businesses. To comply with these foreignownership restrictions, we operate our business in China through a series of contractual arrangements with Beijing Rongke and Beijing Yiyi, andtheir respective shareholders. For a description of these contractual arrangements, see Item 4 “Information on the Company.” Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 119 of 194 Table of Contents118Employment Agreements and Indemnification AgreementsWe have entered into employment agreements with each of our executive officers. The initial term of these employment agreements will be untilthe next shareholders meeting, unless terminated earlier pursuant to the provisions thereof, and these agreements will be automatically extended forsuccessive periods of 12 months each subject to the provisions thereof. We may terminate employment for cause, for certain acts of the executiveofficer, such as conviction or plea of guilty to a felony or any crime involving moral turpitude, or a continued failure to perform agreed duties. Wemay also terminate an executive officer’s employment without cause upon 60-day prior written notice. In such case of termination by us, we willprovide severance payments and other compensation to the executive officer as expressly required by applicable laws and these employmentagreements. The executive officer may resign at any time with a 60-day prior written notice.Each executive officer has agreed to hold, both during and after the termination or expiry of his or her employment agreement, in strict confidenceand not to use, except as required in the performance of his or her duties in connection with the employment or pursuant to applicable law, any ofour confidential information or trade secrets, any confidential information or trade secrets of our customers or prospective customers, or theconfidential or proprietary information of any third party received by us and for which we have confidential obligations. The executive officershave also agreed to disclose in confidence to us all inventions, designs and trade secrets which they conceive, develop or reduce to practice duringthe executive officer’s employment with us and to assign all right, title and interest in them to us, and assist us in obtaining and enforcing patents,copyrights and other legal rights for these inventions, designs and trade secrets.In addition, each executive officer has agreed to be bound by non-competition and non-solicitation restrictions during the term of his or heremployment and typically for one year following the last date of employment. Specifically, each executive officer has agreed not to (i) approachour suppliers, customers, customers or contacts or other persons or entities introduced to the executive officer in his or her capacity as arepresentative of us for the purpose of doing business with such persons or entities that will harm our business relationships with these persons orentities; (ii) assume employment with or provide services to any of our competitors, or engage, whether as principal, partner, licensor or otherwise,any of our competitors, without our express consent; or (iii) seek directly or indirectly, to solicit the services of any of our employees who isemployed by us on or after the date of the executive officer’s termination, or in the year preceding such termination, without our express consent.We have also entered into indemnification agreements with each of our directors and executive officers. Under these agreements, we agree toindemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made byreason of their being a director or officer of our company.Share Incentive PlanSee “Item 6. Directors, Senior Management and Employees—B. Compensation of Directors, Supervisors and Executive Directors—ShareIncentive Plans.” Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 120 of 194 Table of Contents119Other Transactions with Related PartiesOur Relationship with XiaomiXiaomi Corporation, or Xiaomi, beneficially owns 250,641,392 of our Class A Shares. We have entered into various agreements with Xiaomi or itsaffiliates with respect to marketing and branding, software licensing and technology cooperation. These agreements have a term of one to twoyears.Since January 1, 2020, we recorded US$0.4 million in marketing and branding expenses paid to Xiaomi and its affiliates. As of December 31,2020, the amount due from Xiaomi and its affiliates was nil. We believe these arrangements with Xiaomi are not material to the Company orXiaomi.Agreements with Interactive BrokersInteractive Brokers’ affiliate IB Global Investment LLC became one of our major shareholders in June 2018, holding more than 5% of our totalshare capital as of the date of this report. Our New Zealand operating entity, Tiger Brokers (NZ) Limited (previously named Top Capital Partners),entered into a Consolidated Account Clearing Agreement with Interactive Brokers LLC in November 2016. Under this agreement, Tiger Brokers(NZ) Limited maintained consolidated accounts with Interactive Brokers while Interactive Brokers provided execution and clearing services forsuch consolidated accounts. Tiger Brokers (NZ) Limited was solely responsible for the solicitation, opening, approval and monitoring of allconsolidated accounts. Tiger Brokers (NZ) Limited was required to provide a US$10,000 application deposit as well as commissions and fees toInteractive Brokers equal to Interactive Brokers’ standard commission and fees. All securities, cash, investment, collateral and property held by oron behalf of Interactive Brokers for our consolidated accounts are subject to a perfected first priority lien and security interest in the favor ofInteractive Brokers to secure the performance of our obligations and liabilities under the agreement. Either party may terminate this agreement atany time.Tiger Brokers (NZ) Limited entered into a Fully Disclosed Clearing Agreement with Interactive Brokers LLC in November 2016 whereby TigerBrokers (NZ) Limited introduced accounts to Interactive Brokers on a fully disclosed basis in return of Interactive Brokers providing execution andclearing services for such fully disclosed accounts. Under this agreement, Interactive Brokers was responsible for the opening, approval,monitoring and supervision of the fully disclosed accounts including KYC procedures while we are required to perform certain additional KYCfunctions. Tiger Brokers (NZ) Limited was required to provide a US$10,000 application deposit for each account as well as commissions and feesto Interactive Brokers. Interactive Brokers’ share of the commissions and fees collected for transaction in the fully disclosed accounts were equal toits standing commission and fees. The remainder of the commissions and fees collected for the fully disclosed accounts were remitted periodicallyto Tiger Brokers (NZ) Limited. All the property held by or on behalf of Interactive Brokers for our fully disclosed accounts are subject to aperfected first priority lien and security interest in the favor of Interactive Brokers to secure the performance of our obligations and liabilities underthe agreement. Either party may terminate this agreement at any time.Tiger Brokers (NZ) Limited also cooperated with Interactive Brokers LLC in several deals involving allocation of shares in the process of initialpublic offerings by a few issuers.Tiger Brokers (Singapore) PTE Ltd entered into a Consolidated Account Clearing Agreement with Interactive Brokers LLC on October 15, 2019.Under this agreement, Tiger Brokers (Singapore) PTE Ltd maintained consolidated accounts with Interactive Brokers while Interactive Brokersprovided execution and clearing services for such consolidated accounts. Tiger Brokers (Singapore) PTE Ltd was solely responsible for thesolicitation, opening, approval and monitoring of all consolidated accounts. All securities, cash, investment, collateral and property held by or onbehalf of Interactive Brokers for our consolidated accounts are subject to a perfected first priority lien and security interest in the favor ofInteractive Brokers to secure the performance of our obligations and liabilities under the agreement. Either party may terminate this agreement atany time.For the full year of 2020, we recorded US$62.7 million in commissions and financing service fees earned from customer trades cleared by andmargin transactions provided by Interactive Brokers and US$7.1 million in execution and clearing fees paid to Interactive Brokers. As of December31, 2020, the amount due from Interactive Brokers was US$761.7 million, which mainly included the customer’s cash deposit, our revenuereceivables, securities lending transactions from Interactive Brokers. As of December 31, 2020, the amount due to Interactive Brokers wasUS$218.6 million, which represents the Group’s margin and cash collaterals received from securities borrowing transactions from InteractiveBrokers. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 121 of 194 Table of Contents120Consulting fees prepaid to Fast Connection LimitedFast Connection Limited is controlled by one of our shareholders, Xiaochang Shuimu Investment Ltd. At the end of 2018, we prepaid US$2.2million in consulting fees relating to business expansion to Fast Connection Limited. During the year ended December 31, 2019, Fast ConnectionLimited was actively looking for suitable targets for the Company. We had found the suitable target and achieved 30% of the schedule, and werecorded the cost of US$0.7 million in 2020, the prepaid consulting fees was US$1.5 million at the end of December 31, 2020.Loans to Alphalion Technology Holding Limited and its affiliates (“Alphalion Group”)We had issued short-term interest-free loans in an aggregate amount of US$3.3 million to Alphalion Group as of December 31, 2018, including theUS$1.8 million loan to Bluesea Fintech LLC and the US$1.5 million loan to Alphalion Group Limited. The loans were to facilitate such entities’daily operational cash flow needs. Alphalion Group Limited and Bluesea Fintech LLC were controlled by the management of a subsidiary of ourVIE Ningxia Rongke as of December 31, 2018.In February of 2019, we and our affiliates entered into a series of agreements with respective parties regarding the investment in AlphalionTechnology Holding Limited. Under the agreements, we and our affiliates agreed to convert a total of US$3.1 million short-term interest-free loansto Alphalion Group Limited and Bluesea Fintech LLC into 25% equity interest of their parent company, Alphalion Technology Holding Limited.The conversion was consummated on February 22, 2019. Also in the first quarter of 2019, the remaining loan of US$0.3 million from Alphaliongroup was fully paid. Subsequently, the Group provided a total of US$0.9 million short-term interest-free loans to Alphalion Group in 2019, all ofwhich is outstanding, and at the end of December 31,2020, its balance was US$1.0 million due to the change of exchange.The investment was classified as long-term investment. See Note 5 to our audited consolidated financial statements for the more information of thisinvestment in Alphalion Technology Holding Limited.After such investment, Up Fintech Global Holdings Limited accounts for more than 20% of the shareholding of Alphalion Technology HoldingLimited and appointed one director to the board of Alphalion Technology Holding Limited.On November 6,2020, Beijing Huyi Technology Co. entered a technical service agreement with Guangzhou Chenhao Technology Co., Ltd an entitywhich is 100% owned by Alphalion Technology Holding Limited in relation to the ESOP management business in the ordinary course of business.Our Relationship with Ocean Joy Holdings Limited (“Ocean Joy”) and its subsidiaryIn May 2020, we had invested US$0.5 million (HKD3.6 million) to acquire 30% equity interests in Ocean Joy, and its sole subsidiary Ocean JoySecurities Limited which is licensed by the SFC in Hong Kong to carry on business dealing in securities and futures contracts. We accounted forthe investment under the equity method because the investments are of common stock and the Group has significant influence but does not controlOcean Joy.For periods from June of 2020 to December 31, 2020, we recorded US$0.02 million in commissions earned from customer trades cleared providedby Ocean Joy and its subsidiary and US$0.05 million in execution and clearing fees paid to Ocean Joy and its subsidiary. As of December 31, 2020,the amount due from Ocean Joy and its subsidiary was US$2.6 million, which mainly included the customer’s cash deposit, our revenuereceivables, from Ocean Joy and its subsidiary. As of December 31, 2020, the amount due to Ocean Joy and its subsidiary was US$0.01 million,which represents our service fee not paid to Ocean Joy and its subsidiary.We also had issued short-term interest-free loans in amount of US$1.0 million (HKD8.1 million) to Ocean Joy and its subsidiary as of December31, 2020 to facilitate their daily operational cash flow needs. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 122 of 194 Table of Contents121Transactions with Directors and Executive OfficersWe provided brokerage services to our directors and executive officers. These services are provided in the ordinary course of business and aremade on substantially the same terms as those prevailing at the same time for comparable transactions with unaffiliated persons. Our directors andexecutive officers pledged the securities of our Company that they owned to Tiger Brokers (NZ) Limited and Marsco, respectively, as security forthe loan to be provided by Tiger Brokers (NZ) Limited and Marsco to such directors and executive officers up to an aggregate amount ofUS$1,950,000 for personal use in 2020. None of our directors or executive officers received anything in exchange for this pledge. Included inamounts due from related parties in the consolidated balance sheets as of December 31, 2019 and 2020, were receivable from such directors andexecutive officers of nil and US$1,488,273, respectively. Revenue earned by providing brokerage services and margin loans to such directors andexecutive officers amounts to nil, nil and US$79,949 for the years ended December 31, 2018, 2019 and 2020, respectively.Item 8. Financial InformationA. Consolidated Statements and Other Financial InformationSee “Item 18. Financial Statements” for the Company’s Consolidated Financial Statements including the Notes thereto and reports of itsindependent registered accounting firms. The Company has not yet implemented a formal policy on dividend distributions.B. Significant ChangesNo significant changes except as disclosed in the annual report else have occurred since December 31, 2020, the date of the financial statements included in this annual report on Form 20-F.Item 9. The Offer and ListingA.4. Offer and Listing DetailsC. MarketsThe Company’s American Depositary Shares are listed on the Nasdaq Global Select Market under the symbol “TIGR.”Item 10. Additional InformationB. Memorandum and Articles of AssociationWe are a Cayman Islands company and our affairs are governed by our memorandum and articles of association and the Companies Law, Cap. 22(Law 3 of 1961, as consolidated and revised) of the Cayman Islands, or the Companies Law, and the common law of the Cayman Islands.Objects of Our Company. Under our fourth amended and restated memorandum of association, the objects of our company are unrestricted andwe have the full power and authority to carry out any object not prohibited by the laws of the Cayman Islands.General Meetings of Shareholders. As a Cayman Islands exempted company, we are not obliged by the Companies Law to call shareholders’annual general meetings. Our fourth amended and restated articles of association provide that we may (but are not obliged to) in each year hold ageneral meeting as our annual general meeting in which case we shall specify the meeting as such in the notices calling it, and the annual generalmeeting shall be held at such time and place as may be determined by our directors.Shareholders’ general meetings may be convened by the chairman of our board of directors or a majority of our board of directors. Advance noticeof at least ten (10) calendar days is required for the convening of our annual general shareholders’ meeting (if any) and any other general meetingof our shareholders. A quorum required for any general meeting of shareholders consists of at least one shareholder present or by proxy,representing not less than one-third of all votes attaching to all of our shares in issue and entitled to vote. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 123 of 194 Table of Contents122Neither the Companies Law nor our fourth amended and restated articles of association provide shareholders with rights to requisition a generalmeeting or the right to put any proposal before a general meeting.DirectorsA director is not required to hold any shares in our company to qualify to serve as a director. A director may vote with respect to any contract,proposed contract, or arrangement in which he or she is materially interested. A director may exercise all the powers of our company to borrowmoney, mortgage its business, property and uncalled capital and issue debentures or other securities whenever money is borrowed or as security forany obligation of our company or of any third party.Certain other information called for by this Item 10.B is provided in Exhibit 2.1, which is filed as an exhibit to this annual report on Form 20-F.C. Material ContractsRelated Party AgreementsFor a discussion of the Company’s related party transactions, please see Item 7.A “Related Party Transactions” and “Notes to the ConsolidatedFinancial Statements—15. Related Party Balances and Transactions.”Compensation ArrangementsFor a description of compensation arrangements with the Company’s directors and executive officers, please see Item 6.B “Compensation.”FinancingFor a description of the Company’s outstanding financing agreements, please see section Item 4. “Information on the Company —A. History andDevelopment of the Company.”D. Exchange ControlsOther than applicable taxation, anti-money laundering, and counter-terrorist financing law and regulations and certain economic sanctions whichmay be in force from time to time, as described in “Item 4. Information on the Company—B. Business Overview—Regulation—RegulationsRelating to Foreign Exchange,” there are no exchange control regulations or currency restrictions in the Cayman Islands, or any provision of theArticles, which would prevent the transfer of capital or remittance of dividends, interest, and other payments to holders of the Company’s securitieswho are not residents of the Cayman Islands on a general basis.E. TaxationThe following summary of the material Cayman Islands and U.S. federal income tax consequences of an investment in our ADSs or Class Aordinary shares is based upon laws and relevant interpretations thereof in effect as of the date of this report, all of which are subject to change. Thissummary does not deal with all possible tax consequences relating to an investment in our ADSs or Class A ordinary shares, such as the taxconsequences under U.S. state and local tax laws or under the tax laws of jurisdictions other than the Cayman Islands and the United States. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 124 of 194 Table of Contents123Cayman Islands TaxationThe Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is notaxation in the nature of inheritance tax, estate duty or withholding tax applicable to us or to any holder of our ADSs and ordinary shares. There areno other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties which may be applicable oninstruments executed in, or, after execution, brought within the jurisdiction of the Cayman Islands. No stamp duty is payable in the Cayman Islandson transfers of shares of Cayman Islands companies except those which hold interests in land in the Cayman Islands. The Cayman Islands is a partyto a double tax treaty entered with the United Kingdom in 2010 but is otherwise not party to any double tax treaties. There are no exchange controlregulations or currency restrictions in the Cayman Islands.Pursuant to Section 6 of the Tax Concessions Law (2011 Revision) of the Cayman Islands, we have obtained an undertaking from the Governor-in-Council:(1) that no law which is enacted in the Cayman Islands imposing any tax to be levied on profits or income or gains or appreciation shall applyto us or our operations; and(2) that the aforesaid tax or any tax in the nature of estate duty or inheritance tax shall not be payable on our shares, debentures or otherobligations.The undertaking for us is for a period of 30 years from November 19, 2018.United States Federal Income TaxationThe following is a general discussion of certain U.S. federal income tax considerations relating to the ownership and disposition of our ADSs orClass A ordinary shares by U.S. Holders (as defined below) that hold our ADSs or Class A ordinary shares as “capital assets” (generally, propertyheld for investment) under the U.S. Internal Revenue Code of 1986, as amended, or the Code. This discussion does not address any aspect of U.S.federal gift or estate tax, alternative minimum tax, the Medicare tax on net investment income, or the state, local or non-U.S. tax consequences ofan investment in our ADSs and Class A ordinary shares. This discussion is based on the Code, its legislative history, existing and proposedregulations promulgated thereunder, published rulings, court decisions and the income tax treaty between the U.S. and PRC, or the Treaty, all as ofthe date hereof. These laws are subject to change, possibly on a retroactive basis. No ruling has been obtained and no ruling will be requested fromthe U.S. Internal Revenue Service, or the IRS, with respect to any of the U.S. federal income tax consequences described below, and as a result,there can be no assurance that the IRS will not disagree with or challenge any of statements provided below.This discussion is not a complete description of all tax considerations that may be relevant to particular investors in light of their individualcircumstances or investors subject to special tax rules, such as:●brokers or dealers in securities or currencies;●traders in securities that elect to use a mark-to-market method of accounting for securities holdings;●banks or certain financial institutions;●insurance companies;●tax-exempt organizations;●partnerships or other entities treated as partnerships or other pass-through entities for U.S. federal income tax purposes or persons holdingADSs or Class A ordinary shares through any such entities;●regulated investments companies or real estate investment trusts; Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 125 of 194 Table of Contents124●persons that hold ADSs or Class A ordinary shares as part of a hedge, straddle, constructive sale, conversion transaction or otherintegrated investment;●persons subject to special tax accounting rules as a result of any item of gross income with respect to ADSs or Class A ordinary sharesbeing taken into account in an “applicable financial statement” (as defined in section 451 of the Code);●persons holding ADSs or ordinary shares in connection with a trade or business outside the United States;●persons whose functional currency for tax purposes is not the U.S. dollar;●U.S. expatriates; or●persons that actually or constructively own 10% or more of (i) the total combined voting power of all classes of our voting stock or(ii) the total value of all classes of our stock.Prospective investors are urged to consult their own tax advisor concerning the particular U.S. federal income tax consequences to them of theownership and disposition of our ADSs and Class A ordinary shares, as well as the consequences to them arising under the laws of any other taxingjurisdictions.For purposes of the U.S. federal income tax discussion below, a “U.S. Holder” is a beneficial owner of our ADSs or Class A ordinary shares that is:●an individual citizen or resident of the U.S. for U.S. federal income tax purposes;●a corporation, or other entity classified as a corporation, that was created or organized in or under the laws of the U.S. or any state thereofor the District of Columbia;●an estate the income of which is subject to U.S. federal income tax regardless of its source; or●a trust if (i) a court within the U.S. is able to exercise primary supervision over its administration and one or more U.S. persons have theauthority to control all substantial decisions of the trust, or (ii) the trust has a valid election in effect to be treated as a U.S. person.For U.S. federal income tax purposes, income earned through an entity or arrangement classified as a partnership for U.S. federal income taxpurposes is attributed to its owners. Accordingly, if an entity or arrangement classified as a partnership for U.S. federal income tax purposes holdsour ADSs or Class A ordinary shares, the tax treatment of a partner in such a partnership will generally depend on the status of the partner and theactivities of the partnership. Partnerships and their partners should consult their tax advisors regarding the U.S. federal income tax consequences ofowning and disposing of ADSs and Class A ordinary shares in their particular circumstances.If a U.S. Holder holds ADSs, for U.S. federal income tax purposes, the U.S. Holder generally will be treated as the owner of the underlying Class Aordinary shares that are represented by such ADSs. Accordingly, deposits or withdrawals of Class A ordinary shares for ADSs will not be subject toU.S. federal income tax. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 126 of 194 Table of Contents125Dividends on ADSs and Class A ordinary sharesSubject to the “Passive Foreign Investment Company” discussion below, if we make cash distributions and you are a U.S. Holder, the gross amountof any distributions with respect to your ADSs and Class A ordinary shares (including the amount of any taxes withheld therefrom) will beincludible in your gross income on the day you actually or constructively receive such income as dividend income if the distributions are madefrom our current or accumulated earnings and profits, calculated according to U.S. federal income tax principles. We do not intend to calculate ourearnings and profits according to U.S. federal income tax principles. Accordingly, distributions on our ADSs and Class A ordinary shares, if any,will generally be reported to you as dividend distributions for U.S. tax purposes. Dividends received on our ADSs or Class A ordinary shares willnot be eligible for the dividends received deduction allowed to corporations.With respect to non-corporate U.S. Holders, certain dividends received from a qualified foreign corporation may be subject to a reduced capitalgains tax rate rather than the marginal tax rates generally applicable to ordinary income. A non-U.S. corporation (other than a corporation that isclassified as a PFIC for the taxable year in which the dividend is paid or in the preceding taxable year) generally will be treated as a qualifiedforeign corporation (i) if it is eligible for the benefits of a comprehensive tax treaty with the U.S. that includes an exchange of information programor (ii) with respect to any dividend it pays on stock which is readily tradable on an established securities market in the U.S. We expect that ourADSs, which we have applied to list on the Nasdaq Global Select Market, will be readily tradable on an established securities market in the U.S.Since we do not expect our Class A ordinary shares to be listed on an established securities market, we do not believe that dividends we pay on ourClass A ordinary shares that are not represented by ADSs will meet the conditions required for the reduced capital gains tax rate. There can be noassurance that our ADSs will be considered readily tradable on an established securities market in later years. Non-corporate U.S. Holders of ourADSs that do not meet a minimum holding period requirement will not be eligible for the reduced capital gain tax rate with respect to our dividendsregardless of our status as a qualified foreign corporation. In the event that we are deemed to be a PRC resident enterprise under PRC tax law (see“Item 10.E Taxation—People’s Republic of China Taxation”), we may be eligible for the benefits of the Treaty. Dividends we pay on our ADSs orClass A ordinary shares to non-corporate U.S. Holders during the course of a taxable year during which we are eligible for such benefits would beeligible for the reduced capital gains tax rate, in the case of Class A ordinary shares regardless of whether they are represented by our ADSs. Youshould consult your own tax advisor regarding the availability of the reduced capital gain tax rate for dividends paid with respect to our ADSs andClass A ordinary shares.For U.S. foreign tax credit purposes, dividends we pay on our ADSs or Class A ordinary shares generally will be treated as income from foreignsources and generally will constitute passive category income. Depending on your individual facts and circumstances, you may be eligible, subjectto a number of complex limitations, to claim a foreign tax credit in respect of foreign withholding taxes that may be imposed on dividends receivedon our ADSs or Class A ordinary shares. You should consult your own tax advisors as to your ability, and the various limitations on your ability, toclaim foreign tax credits in connection with the receipt of dividends.Sales and Other Dispositions of ADSs or Class A ordinary sharesSubject to the “Passive Foreign Investment Company” discussion below, when you sell or otherwise dispose of ADSs or Class A ordinary shares,you will recognize capital gain or loss in an amount equal to the difference between the amount realized on the sale or other disposition and youradjusted tax basis in the ADSs or Class A ordinary shares. Your adjusted tax basis will equal the amount you paid for the ADSs or Class A ordinaryshares. Any gain or loss you recognize will generally be long-term capital gain or loss if your holding period in our ADSs or Class A ordinaryshares is more than one year at the time of disposition. If you are a non-corporate U.S. Holder, including an individual, any such long-term capitalgain will generally be eligible for a reduced rate of taxation. The deductibility of a capital loss is subject to limitations.Gains from dispositions of our ADSs or Class A ordinary shares may be subject to PRC tax if such gains are deemed as income derived fromsources within China for PRC tax purposes (see “Item 10.E Taxation—People’s Republic of China Taxation”). In that case, a U.S. Holder’s amountrealized would include the gross amount of the proceeds of the sale or disposition before deduction of the PRC tax. Any gain generally wouldconstitute U.S. source income, which generally does not give rise to foreign tax credits. However, a U.S. Holder that is eligible for the benefits ofthe Treaty may be able to elect to treat its gain as foreign source gain for foreign tax credit purposes. You should consult your own tax advisorsregarding your eligibility for benefits under the Treaty and the creditability of any PRC tax on disposition gains in your particular circumstances. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 127 of 194 Table of Contents126Passive Foreign Investment CompanyIf we were classified as a passive foreign investment company or “PFIC” in any taxable year in which you hold our ADSs or Class A ordinaryshares, as a U.S. Holder, you would generally be subject to adverse U.S. tax consequences, in the form of increased tax liabilities and special U.S.tax reporting requirements.In general, we will be classified as a PFIC for any taxable year if either (i) at least 75% of our gross income for the taxable year is passive incomeor (ii) at least 50% of the value of our assets (based on a quarterly value of the assets during the taxable year) is attributable to assets that produceor are held for the production of passive income, or the asset test. For purposes of making PFIC determination, we will be treated as owning ourproportionate share of the assets and earning our proportionate share of the gross income of any other corporation of which we are, directly orindirectly, a 25% or greater shareholder (by value). Passive income generally includes interest and for purposes of the asset test, any cash and loanswill generally count as producing passive income or held for the production of passive income.Assuming that we are the owner of the VIEs for U.S. federal income tax purposes, and based on the expected composition of our income and assetsand the value of our assets, including goodwill, we do not expect to be classified as a PFIC for the current taxable year ending December 31, 2020or in the foreseeable future. Despite our expectation, there can be no assurance that we will not be a PFIC in the current taxable year or any futuretaxable year as PFIC status is tested each taxable year and will depend on the composition of our assets and income in each such taxable year. Inparticular, in determining the average percentage value of our gross assets, the aggregate value of our assets will generally be deemed to be equal toour market capitalization (the sum of the aggregate value of our outstanding equity) plus our liabilities. Accordingly, we could become a PFIC ifour market capitalization were to decrease significantly while we hold substantial cash, cash equivalents or other assets that produce or are held forthe production of passive income such as loans to customers. In addition, we expect to increase our margin loan business (where we extend marginloans using our own capital rather than Interactive Brokers’ capital) which will increase our passive interest income. Furthermore, although the lawin this regard is not entirely clear, we treat our consolidated VIEs as being owned by us for U.S. federal income tax purposes because we controltheir management decisions and are entitled to substantially all of the economic benefits associated with these entities. If it were determined,however, that we are not the owner of the consolidated VIEs for U.S. federal income tax purposes, we may be treated as a PFIC for the currenttaxable year and any subsequent taxable year. Because there are uncertainties in the application of the relevant rules, it is possible that the IRS maychallenge our classification of certain income and assets as non-passive or our valuation of our tangible and intangible assets, which could result ina determination that we were a PFIC for the current or subsequent taxable years.If we were a PFIC for any taxable year during which you held ADSs or Class A ordinary shares, certain adverse U.S. federal income taxrules would apply. You would generally be subject to additional taxes and interest charges on certain “excess distributions” we make and on anygain realized on the disposition or deemed disposition of your ADSs or Class A ordinary shares, regardless of whether we continue to be a PFIC inthe year in which you receive an “excess distribution” or dispose (or are deemed to have disposed, as described below) of your ADSs or Class Aordinary shares. Distributions in respect of your ADSs or Class A ordinary shares during a taxable year would generally constitute “excessdistributions” if, in the aggregate, they exceed 125% of the average amount of distributions with respect to your ADSs or Class A ordinary sharesover the three preceding taxable years or, if shorter, the portion of your holding period before such taxable year.To compute the tax on “excess distributions” or any gain, (i) the “excess distribution” or the gain would be allocated ratably to each day in yourholding period, (ii) the amount allocated to the current year and any tax year prior to the first taxable year in which we were a PFIC would be taxedas ordinary income in the current year, (iii) the amount allocated to other taxable years would be taxable at the highest applicable marginal rate ineffect for that year, and (iv) an interest charge at the rate for underpayment of taxes for any period described under (iii) above would be imposed onthe resulting tax liability on the portion of the “excess distribution” or gain that is allocated to such period. In addition, no distribution that youreceive from us would qualify for taxation at the reduced capital gain tax rate discussed under “Item 10.E Taxation—Dividends on ADSs andClass A ordinary shares” section above if we were a PFIC in the taxable year in which such distribution is made or in the preceding taxable year.If we were a PFIC for any year during which you hold ADSs or Class A ordinary shares, we generally will continue to be treated as a PFIC withrespect to such ADSs or Class A ordinary shares in all succeeding years during which you hold ADSs or Class A ordinary shares, even if we ceaseto meet the threshold requirements for PFIC status, unless you made a “deemed sale” election. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 128 of 194 Table of Contents127Under certain attribution rules, if we were a PFIC, you would be deemed to own your proportionate share of any of our non-U.S. subsidiaries andVIEs that are PFICs, each a “lower-tier PFIC”, and would be subject to U.S. federal income tax according to the PFIC rules described above on(i) a distribution on the shares of a lower-tier PFIC and (ii) a disposition of shares of a lower-tier PFIC, both as if you directly held the shares ofsuch lower-tier PFIC.If we were a PFIC in any year, you would generally be able to avoid the “excess distribution” rules described above by making a timely so-called“mark-to-market” election with respect to your ADSs provided they are “marketable.” Our ADSs will be “marketable” as long as they remainregularly traded on a national securities exchange, such as the Nasdaq. If you made this election in a timely fashion, you would generally recognizeas ordinary income or ordinary loss the difference between the fair market value of your ADSs as of the close of any taxable year and your adjustedtax basis in such ADSs. Any ordinary income resulting from this election would generally be taxed at ordinary income rates and would not beeligible for the reduced capital gain tax rate discussed under “Item 10.E Taxation—Dividends on ADSs and Class A ordinary shares” sectionabove. Any ordinary losses would be deductible, but only to the extent of the net amount of previously included income as a result of the mark-to-market election, if any. Your basis in the ADSs or Class A ordinary shares would be adjusted to reflect any such income or loss. If you make amark-to-market election with respect to our ADSs, but for a later taxable year either our ADSs no longer constitute “marketable stock” or we ceasebeing a PFIC, you will not be subject to the mark-to market rules described above for such taxable year. The mark-to-market election will not beavailable for any lower tier PFIC that you may be deemed to own pursuant to the attribution rules discussed above. You should consult your owntax advisor regarding potential advantages and disadvantages to you of making a “mark-to-market” election with respect to your ADSs.The PFIC rules provide for a separate election, referred to as a qualified electing fund election, which, if available, results in a tax treatmentdifferent than the general PFIC tax treatment described above. That election, however, will not be available to you as we do not intend to providethe information you would need to make or maintain that election.If you own our ADSs or Class A ordinary shares during any taxable year that we are a PFIC, you will generally be required to file an annual reportcontaining such information as the United States Treasury Department may require. You are advised to consult with your own tax advisorconcerning our PFIC status and the U.S. federal income tax consequences of holding and disposing of our ADSs or Class A ordinary shares if weare or become classified as a PFIC.U.S. Information Reporting and Backup Withholding RulesDividend payments with respect to the ADSs and Class A ordinary shares and the proceeds received on the sale or other disposition of ADSs andClass A ordinary shares may be subject to information reporting to the IRS and to backup withholding. Backup withholding will not apply, however, if (i) a U.S. Holder is an exempt recipient, or if (ii) the U.S. Holder provides a taxpayer identification number, certifying that the U.S. Holder is not subject to backup withholding. Any amounts withheld under the backup withholding rules from a payment to a U.S. Holder will be refunded or credited against such U.S. Holder’s U.S. federal income tax liability, provided that the required information is timely provided to the IRS. Certain U.S. Holders who hold “specific foreign financial assets”, including stock of a non-U.S. corporation that is not held in an account maintained by a U.S. “financial institution” may be required to attach to their tax returns for the year certain specified information. A U.S. Holder who fails to timely furnish the required information may be subject to a penalty. You are advised to consult with its own tax advisor regarding the application of the U.S. information reporting and backup withholding rules to your particular circumstances.H. Documents on DisplayThe Company files reports, including annual reports on Form 20-F, furnishes current reports on Form 6-K and discloses other information with theSEC pursuant to the rules and regulations of the SEC that apply to foreign private issuers. These may be accessed by visiting the SEC’s website atwww.sec.gov. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 129 of 194 Table of Contents128Item 11. Quantitative and Qualitative Disclosures About Market RiskThe Company’s activities expose it to a variety of market risks including interest rate risk and foreign currency exchange rate risk. The Company’soverall risk management strategy focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on itsperformance through ongoing operational and finance activities. The Company monitors and manages its exposure to such risks both centrally andat the local level, as appropriate, as part of its overall risk management program with the objective of seeking to reduce the potential adverse effectsof such risks on its results of operations and financial position.The following section provides qualitative and quantitative disclosures on the effects that these risks may have. The quantitative data reportedbelow does not have any predictive value and does not reflect the complexity of the markets or reactions which may result from any changes thatare assumed to have taken place.Foreign Exchange RiskWhile most of our revenues are denominated in U.S. dollars and Hong Kong dollars and our expenses are denominated in Renminbi and U.S.dollars, the Company has not used any derivative financial instruments to hedge exposure to such risk as our exposure to foreign exchange risksshould be limited in general per management’s assessment. Our results of operations and financial condition will be affected by the exchange ratebetween U.S. dollar and Hong Kong dollar as well as between U.S. dollar and Renminbi because a substantial portion of our operating costs andexpenses is effectively denominated in Renminbi, while our ADSs will be traded in U.S. dollars. We may seek to reduce the currency risk byentering foreign currency instruments in the future. Currently we did not hold any currency hedging instruments position as of December 31, 2019and 2020 due to immaterial impact on our daily operation and financials, whilst the Company has been monitoring the exchange rates which mayaffect our business and financials and will take necessary actions to mediate foreign exchange risks. See Item 3.D “Risk Factors.”The conversion of Renminbi into foreign currencies, including U.S. dollars, is based on rates set by the People’s Bank of China. In July 2005, thePRC government changed its decades-old policy of pegging the value of Renminbi to U.S. dollar, and Renminbi appreciated more than 20%against U.S. dollar over the following three years. Between July 2008 and June 2010, this appreciation halted and the exchange rate betweenRenminbi and U.S. dollar remained within a narrow band. Since June 2010, Renminbi has fluctuated against U.S. dollar, at times significantly andunpredictably. With the development of the foreign exchange market and progress towards interest rate liberalization and Renminbiinternationalization, the PRC government may in the future announce further changes to the exchange rate system. It is difficult to predict howmarket forces or PRC or U.S. government policy may impact the exchange rate between Renminbi and U.S. dollar in the future.To the extent that we need to convert U.S. dollar into Renminbi for our operations, appreciation of Renminbi against U.S. dollar would have anadverse effect on the Renminbi amount we receive from the conversion. Conversely, if we decide to convert Renminbi into U.S. dollar for thepurpose of making payments for dividends on our ordinary shares or ADSs or for other business purposes, appreciation of U.S. dollar againstRenminbi would have a negative effect on U.S. dollar amounts available to us.Interest Rate RiskWe have not been exposed to material risks due to changes in market interest rates, and we have not used any derivative financial instruments tomanage our interest risk exposure.We expect rising or falling interest rates may have a material impact on our financial condition unless uncertainty about the direction and timing ofinterest rate changes materially affects the level of borrowing and lending activity in the economy.We may invest in interest-earning instruments. Investments in both fixed rate and floating rate interest earning instruments carry a degree of interestrate risk. Fixed rate securities may have their fair market value adversely impacted due to a rise in interest rates, while floating rate securities mayproduce less income than expected if interest rates fall. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 130 of 194 Table of Contents129Credit RiskMargin financing are subject to various regulatory requirements. Margin loans are collateralized by cash and securities in the customers’ accounts.The risks associated with margin credit increase during periods of fast market movements or in cases where collateral is concentrated and marketmovements occur. During such times, customers who utilize margin loans and who have collateralized their obligations with securities may findthat the securities have a rapidly depreciating value and may not be sufficient to cover their obligations in the event of liquidation. We are alsoexposed to credit risk when our customers execute transactions, such as short sales of options and equities that can expose them to risk beyond theirinvested capital.We expect this kind of exposure to increase with the growth of our overall business. Because we indemnify and hold harmless our clearing firmsfrom certain liabilities or claims, the use of margin loans and short sales may expose us to significant off-balance-sheet risk in the event thatcollateral requirements are not sufficient to fully cover losses that customers may incur and those customers fail to satisfy their obligations. Theamount of risk to which we are exposed from the margin financing to our customers and from short-selling transactions by our customers is notquantifiable as the risk is dependent upon analysis of a potential significant and undeterminable rise or fall in stock prices. Our account levelmargin requirements meet or exceed those required by the NZX Participant Rules, in relation to the calculation of our counterparty riskrequirement. As a matter of practice, we enforce real-time margin compliance monitoring and liquidate customers’ positions if their equity fallsbelow required margin requirements.We have a comprehensive policy implemented in accordance with regulatory standards to assess and monitor the suitability of investors to engagein the trading activities that we offer. To mitigate our risk, we also continuously monitor customer accounts to detect excessive concentration, largeorders or positions, patterns of day trading, high frequency trading, inactive accounts, trading that has no economic purpose, trading in illiquidsecurities and other activities that indicate increased risk to us.Our credit exposure is to a great extent mitigated by our policy of automatically evaluating each account throughout the trading day and closing outpositions automatically or disabling further trading for accounts that are found to be under-margined. While this methodology is effective in mostsituations, it may not be effective in situations where no liquid market exists for the relevant securities or commodities or where, for any reason,automatic liquidation for certain accounts has been disabled.Other Market RiskWe earn ETF service fees based upon balances of certain client assets. Fluctuations in these client asset balances caused by changes in equityvaluations directly impact the amount of fee revenue we earn. Our UP Fintech China-U.S. Internet Titans ETF was delisted on November 2020. Wemay investment in similar financial instrument utilize capital that would otherwise be available for other corporate purposes and expose us topotential capital losses. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 131 of 194 Table of Contents130Item 12. Description of Securities Other than Equity SecuritiesADS Fees and ExpensesADS holders are required to pay the following service fees to the depositary bank and certain taxes and governmental charges (in addition to anyapplicable fees, expenses, taxes and other governmental charges payable on the deposited securities represented by any ADSs):Service Fees· To any person to which ADSs areissued or to any person to which adistribution is made in respect ofADS distributions pursuant to stockdividends or other free distributionsof stock, bonus distributions, stocksplits or other distributions (exceptwhere converted to cash) Up to US$0.05 per ADS issued· Cancellation of ADSs, including thecase of termination of the depositagreement Up to US$0.05 per ADS cancelled· Distribution of cash dividends Up to US$0.05 per ADS held· Distribution of cash entitlements(other than cash dividends) and/orcash proceeds from the sale of rights,securities and other entitlements Up to US$0.05 per ADS held· Distribution of ADSs pursuant toexercise of rights. Up to US$0.05 per ADS held· Distribution of securities other thanADSs or rights to purchase additionalADSs Up to US$0.05 per ADS held· Depositary services Up to US$0.05 per ADS held on the applicable record date(s) established by the depositary bankADS holders are also responsible to pay certain fees and expenses incurred by the depositary bank and certain taxes and governmental charges (inaddition to any applicable fees, expenses, taxes and other governmental charges payable on the deposited securities represented by any ADSs) suchas:●Fees for the transfer and registration of ordinary shares charged by the registrar and transfer agent for the ordinary shares in the CaymanIslands (i.e., upon deposit and withdrawal of ordinary shares).●Expenses incurred for converting foreign currency into U.S. dollars.●Expenses for cable, telex and fax transmissions and for delivery of securities.●Taxes and duties upon the transfer of securities, including any applicable stamp duties, any stock transfer charges or withholding taxes(i.e., when ordinary shares are deposited or withdrawn from deposit).●Fees and expenses incurred in connection with the delivery or servicing of ordinary shares on deposit.●Fees and expenses incurred in connection with complying with exchange control regulations and other regulatory requirements applicableto ordinary shares, deposited securities, ADSs and ADRs.●Any applicable fees and penalties thereon. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 132 of 194 Table of Contents131The depositary fees payable upon the issuance and cancellation of ADSs are typically paid to the depositary bank by the brokers (on behalf of theirclients) receiving the newly issued ADSs from the depositary bank and by the brokers (on behalf of their clients) delivering the ADSs to thedepositary bank for cancellation. The brokers in turn charge these fees to their clients. Depositary fees payable in connection with distributions ofcash or securities to ADS holders and the depositary services fee are charged by the depositary bank to the holders of record of ADSs as of theapplicable ADS record date.The depositary fees payable for cash distributions are generally deducted from the cash being distributed or by selling a portion of distributableproperty to pay the fees. In the case of distributions other than cash (i.e., share dividends, rights), the depositary bank charges the applicable fee tothe ADS record date holders concurrent with the distribution. In the case of ADSs registered in the name of the investor (whether certificated oruncertificated in direct registration), the depositary bank sends invoices to the applicable record date ADS holders. In the case of ADSs held inbrokerage and custodian accounts (via DTC), the depositary bank generally collects its fees through the systems provided by DTC (whose nomineeis the registered holder of the ADSs held in DTC) from the brokers and custodians holding ADSs in their DTC accounts. The brokers andcustodians who hold their clients’ ADSs in DTC accounts in turn charge their clients’ accounts the amount of the fees paid to the depositary banks.In the event of refusal to pay the depositary fees, the depositary bank may, under the terms of the deposit agreement, refuse the requested serviceuntil payment is received or may set off the amount of the depositary fees from any distribution to be made to the ADS holder.The depositary may make payments to us or reimburse us for certain costs and expenses, by making available a portion of the ADS fees collectedin respect of the ADR program or otherwise, upon such terms and conditions as we and the depositary bank agree from time to time. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 133 of 194 Table of Contents132PART IIItem 13. Defaults, Dividends, Arrearages, and DelinquenciesNone of these events occurred in any of the years ended December 31, 2018, 2019 and 2020.Item 14. Material Modifications to the Rights of Security Holders and Use of ProceedsSee the information contained in Item 10. B. “Memorandum and Articles of Association.”Use of ProceedsOn March 20, 2019, the Company completed its initial public offering of 14,950,000 ADSs (reflecting the exercise of the over-allotment option bythe underwriters to purchase an additional 1,950,000 ADSs), each representing 15 Class A ordinary shares, at an initial offering price of US$8.00per ADS, pursuant to a registration statement on Form F-1 (File Number 333-229808) (the “F-1 Registration Statement”) that was declaredeffective by the Securities and Exchange Commission on March 19, 2019. Citigroup Global Markets Inc., Deutsche Bank Securities Inc., AMTDGlobal Markets Limited, China Merchants Securities (HK) Co., Limited, Top Capital Partners Limited were the representatives of the underwritersfor our IPO. The aggregate price of the offering amount registered and sold, including the amount registered and sold for exercise of over-allotmentoption and concurrent private placement, were US$126.6 million. The following “Use of Proceeds” information relates to the F-1 RegistrationStatement.For the period from the effective date of the F-1 Registration Statement to December 31, 2019, our total expenses incurred in connection with ourIPO were US$11.8 million, which included US$8.3 million in underwriting discounts and commissions for the IPO, US$3.5 million in other costsand expenses for our IPO. We received net proceeds of US$114.8 million from our initial public offering. None of the transaction expensesincluded payments to directors or officers of our company or their associates, persons owning more than 10% or more of our equity securities orour affiliates. None of the net proceeds from the initial public offering were paid, directly or indirectly, to any of our directors or officers or theirassociates, persons owning 10% or more of our equity securities or our affiliates.For the period from the effective date of the F-1 Registration Statement to December 31, 2019, the net proceeds we used from our initial publicoffering were US$14.4 million for general corporate purposes and working capital, and US$15.4 million for investments and acquisitions.As of December 31, 2020, we had used the remainder of our initial public offering proceeds for margin financing business and general corporatepurposes, including research and development, working capital needs, and increased regulatory capital requirements of the regulatory authorities inother jurisdictions as a result of our business expansion.Item 15. Controls and ProceduresDisclosure Controls and ProceduresOur management, under the supervision and with the participation of our chief executive officer and chief financial officer, carried out anevaluation of the effectiveness of our disclosure controls and procedures, which is defined in Rules 13a-15(e) of the Exchange Act, as ofDecember 31, 2020. Disclosure controls and procedures refers to controls and other procedures that are designed to ensure that informationrequired to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, withinthe time periods specified in the SEC’s rule and forms and that such information required to be disclosed by us in the reports that we file or submitunder the Exchange Act is compiled and communicated to our management, including our principal executive and principal financial officers, orpersons performing similar functions, as appropriate to allow timely decisions regarding required disclosures.Based upon that evaluation, our management, with the participation of our chief executive officer and chief financial officer, has concluded that, asof the end of the period covered by this annual report, our disclosure controls and procedures were not effective as of December 31, 2020 caused bythe material weakness in our internal control over financial reporting described below. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 134 of 194 Table of Contents133Management’s Report on Internal Control over Financial Reporting and Attestation Report of the Registered Public Accounting FirmManagement is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financialreporting is designed to provide reasonable assurance regarding the preparation of financial statements for external purposes in accordance withU.S. GAAP.Our management evaluated the effectiveness of internal control design over financial reporting based on criteria established in the framework inInternal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.Based on this evaluation, our management has concluded that our internal control over financial reporting was not effective as of December 31,2020. In 2020, we set up a team that is dedicated on the internal control of the company and have conducted an overall review on the company'sinternal control, and have satisfied the compliance requirements of internal control at the design level.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of anyevaluation of effectiveness of our internal control over financial reporting to future periods are subject to the risk that controls may becomeinadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.Changes in Internal Control over Financial ReportingPrior to our initial public offering, we were a private company with limited accounting personnel and other resources with which to address ourinternal control and procedures over financial reporting. In preparing our consolidated financial statements for the three years in the period endedDecember 31, 2018 included in our registration statement on Form F-1 filed in connection with our initial public offering, we and our independentregistered public accounting firm identified two “material weakness” in our internal control over financial reporting, as defined in the standardsestablished by the Public Company Accounting Oversight Board of the United States, and other control deficiencies. A “material weakness” is adeficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a materialmisstatement of our company’s annual or interim financial information will not be prevented or detected on a timely basis. The materialweaknesses identified relate to (i) insufficient accounting personnel with appropriate knowledge of U.S. GAAP and lack of comprehensiveaccounting policies and procedures in accordance with U.S. GAAP, and (ii) lack of a systematic risk assessment process over financial reporting.As an emerging growth company, our independent registered public accounting firms have not undertaken a comprehensive assessment of ourinternal control under the Sarbanes-Oxley Act of 2002 for purposes of identifying and reporting any weakness in our internal control over financialreporting. Therefore our independent certified public accountant firms cannot confirm whether we have established a systematic risk assessmentprocess over financial reporting.To remedy the identified material weaknesses, we have adopted and will adopt further measures to improve our internal control over financial reporting. We increased the number of employees with knowledge of U.S. GAAP and SEC regulations within our finance and accounting department in 2019, and we are implementing a comprehensive accounting manual to guide the day-to-day accounting operation and reporting work and measures to improve controls of our information systems. The internal control department was set up in September 2020. Our colleagues have rich experiences in the internal control and compliance management of US-listed companies. The internal control department has reviewed the internal control system of the company in the second half of 2020, and rectification of the spotted issues is on the schedule. In addition, we plan to, among others, (i) continue to provide our accounting staff with U.S. GAAP training, and (ii) develop and implement a systematic risk assessment process over financial reporting. We will continue to implement measures to remediate our internal control deficiencies in order to meet the deadline imposed by Section 404 of the Sarbanes Oxley Act. We expect that we will incur more costs in the implementation of such measures. However, the implementation of these measures may not fully address the deficiencies in our internal control over financial reporting. See “Item 3. Key Information — D. Risk Factors— Risks Related to Our Business and Industry— If our internal control over financial reporting or our disclosure controls and procedures are not effective, we may not be able to accurately report our financial results, prevent fraud or file our periodic reports in a timely manner.” Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 135 of 194 Table of Contents134Because we are an emerging growth company, our independent registered public accounting firm has not undertaken a comprehensive assessmentof our internal control under the Sarbanes-Oxley Act of 2002 for purposes of identifying and reporting any weakness in our internal control overfinancial reporting. Once we cease to be an “emerging growth company” as such term is defined in the JOBS Act, our independent registeredpublic accounting firm must attest to the effectiveness of our internal control over financial reporting. Had our independent registered publicaccounting firm performed an audit of our internal control over financial reporting, additional control deficiencies may have been identified.Item 16A. Audit Committee Financial ExpertThe Company’s Board of Directors has determined that Mr. Xin Fan is an audit committee financial expert. He is an independent director under theNasdaq standards.Item 16B. Code of EthicsThe Company has adopted a Code of Business Conduct and Ethics which is applicable to all of its directors, officers and employees, includingcertain portions of the Code of Business Conduct and Ethics which are only applicable to the Company’s chief executive officer, chief financialofficer, other chief senior officers, senior finance officer, controller, vice presidents and any other persons who performance similar functions(defined in the Code of Business Conduct and Ethics as “senior officers”). This Code of Business Conduct and Ethics is posted on its website,www.itiger.com. The information contained on the Company’s website is not included in, or incorporated by reference into, this annual report onForm 20-F.Item 16C. Principal Accountant Fees and ServicesThe following table sets forth the aggregate fees by the categories specified below in connection with certain professional services rendered by ourindependent registered public accounting firms for the periods indicated. We did not pay any other fees to our auditors during the periods indicatedbelow.For the years ended December 31, 2019 2020(3)US$ ‘000US$ ‘000Audit fees (1) 767 1,543Tax fees (2) 40 46 807 1,589(1)Audit fees represent the aggregate fees billed for professional services rendered by our principal auditors for the audit of our annualfinancial statements, the review of our quarterly financial statements.(2)Tax fees represent the aggregate fees billed in each of the fiscal years listed for professional services rendered by our principal auditor fortax compliance, tax advice, and tax planning.(3)On December 9, 2020, we engaged KPMG Huazhen LLP (“KPMG”) as our independent registered public accounting firm to replaceTouche Tohmatsu Certified Public Accountants LLP (“Deloitte”). See also "Item 16F. Change in Registrant's Certifying Accountant.”Audit Committee’s Pre-Approval Policies and ProceduresThe Company’s Audit Committee is responsible for appointing the independent auditors and pre-approving all auditing and non-auditing servicespermitted to be performed by the independent auditors.Item 16D. Exemptions from the Listing Standards for Audit CommitteesNone. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 136 of 194 Table of Contents135Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers2020 Repurchases of ADSs(1) Total Number of Maximum NumberADSs(or ApproximatePurchased asDollar Value) ofPart of PubliclyADSs that May YetTotal NumberAverageAnnouncedBe Purchasedof ADSsPrice PaidPlans orUnder the Plans orPeriodPurchasedper ADSProgramsProgramsApril 2020 300,500 2.7865 300,500 US$19,162,667May 2020 233,868 3.0067 534,358 US$18,459,487June 2020 160,919 3.9293 695,287 US$17,827,181July 2020 — — 695,287 US$17,827,181August 2020 — — 695,287 US$17,827,181Total 695,287 3.1251 695,287 US$17,827,181(1)On March 25, 2020, we announced that our Board of Directors had approved a share repurchase program pursuant to which we maypurchase its outstanding ADSs with an aggregate market value of up to US$20 million over the succeeding 12-month period. We haveused our available cash to fund repurchases made under this program. The Company commenced its share repurchase program on April 1,2020, and it expired by its terms on August 31, 2020.Item 16F. Change in Registrant’s Certifying AccountantOn December 9, 2020, the Company engaged KPMG Huazhen LLP (“KPMG”) as the Company’s independent registered public accounting firm,to replace Deloitte Touche Tohmatsu Certified Public Accountants LLP (“Deloitte”). The change of the Company’s independent registered publicaccounting firm was approved by the Audit Committee of its Board of Directors, and the decision was not made due to any disagreements betweenus and Deloitte.The reports of Deloitte on our consolidated financial statements for the fiscal years ended December 31, 2018 and 2019 did not contain an adverseopinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principle.During the fiscal years ended December 31, 2018 and 2019 and the subsequent interim period through December 9, 2020, there have been no (i)disagreements between us and Deloitte on any matter of accounting principles or practices, financial statement disclosure, or audit scope orprocedure, which disagreements if not resolved to the satisfaction of Deloitte would have caused them to make reference thereto in their reports onthe consolidated financial statements for such years, or (ii) reportable events as defined in Form 20-F Item 16F (a)(1)(v) other than the materialweaknesses of (a) insufficient accounting personnel with appropriate knowledge of U.S. GAAP and lack of comprehensive accounting policies andprocedures in accordance with U.S. GAAP, and (b) lack of a systematic risk assessment process over financial reporting reported in our 2018annual report on Form F-1 filed with the Securities and Exchange of Commission on February 22, 2019 and our 2019 annual report on Form 20-Ffiled with the Securities and Exchange of Commission on April 29, 2020.During each of the fiscal years ended December 31, 2018 and 2019 and the subsequent interim period through December 9, 2020, neither we noranyone on behalf of us has consulted with KPMG regarding (i) the application of accounting principles to a specific transaction, either completedor proposed, or the type of audit opinion that might be rendered on our consolidated financial statements, and neither a written report nor oraladvice was provided to us that KPMG concluded was an important factor considered by us in reaching a decision as to any accounting, audit, orfinancial reporting issue, (ii) any matter that was the subject of a disagreement pursuant to Item 16F of the instructions to Form 20-F, or (iii) anyreportable event pursuant to Item 16F of the instructions to Form 20-F. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 137 of 194 Table of Contents136Item 16G. Corporate GovernanceAs a foreign private issuer whose Class A ordinary shares and ADSs are listed on the Nasdaq Global Select Market, we are permitted to followcertain home country corporate governance practices instead of certain Nasdaq requirements. A foreign private issuer that elects to follow its homecountry practice must submit to The Nasdaq Stock Market LLC a written statement from an independent counsel in such issuer’s home countrycertifying that the issuer’s practices are not prohibited by the home country’s laws. In addition, a foreign private issuer must disclose in its annualreports filed with the SEC each Nasdaq requirement with which it does not comply followed by a description of its applicable home countrypractice.As a company incorporated in the Cayman Islands with Class A ordinary shares and ADSs to be listed on the Nasdaq Global Select Market, wechose to follow our home country practice instead of Nasdaq requirements that mandate that:●the board of directors be comprised of a majority of independent directors;●the directors be selected or nominated by a majority of the independent directors or a nomination committee comprised solely ofindependent directors;●the board of directors adopt a formal written charter or board resolution addressing the director nominations process and such relatedmatters as may be required under the U.S. federal securities laws;●the compensation of our executive officers be determined or recommended by a compensation committee comprised solely ofindependent directors; and●shareholder approval is required prior to the issuance of securities when a stock option or other equity compensation arrangement isestablished or materially amended, pursuant to which stock may be acquired by officers, directors, employees, or consultants.The Company is a “controlled company” as defined under the Nasdaq Stock Market Rules because Mr. Tianhua Wu, our founder, director and chiefexecutive officer, holds more than 50% of our total voting power. For so long as we remain as a controlled company, we are permitted to elect to,and may, rely on certain exemptions from corporate governance requirements otherwise applicable.Implications of Being an “Emerging Growth Company”As a company with less than US$1.07 billion in revenue for our last fiscal year, we qualify as an “emerging growth company” pursuant to theJumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of specified reduced reportingand other requirements compared to those that are otherwise applicable generally to public companies. These provisions include exemption fromthe auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, in the assessment of theemerging growth company’s internal control over financial reporting. The JOBS Act also provides that an emerging growth company does not needto comply with any new or revised financial accounting standards until such date that a private company is otherwise required to comply with suchnew or revised accounting standards. However, we have elected to “Opt Out” of this provision and, as a result, we will comply with new or revisedaccounting standards as required when they are adopted for public companies.We will remain an emerging growth company until the earliest of (a) the last day of the fiscal year during which we have total annual grossrevenues of at least US$1.07 billion; (b) the last day of our fiscal year following the fifth anniversary of the completion of our initial publicoffering; (c) the date on which we have, during the preceding three-year period, issued more than US$1.0 billion in non-convertible debt; or (d) thedate on which we are deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended, or the Exchange Act. Oncewe cease to be an emerging growth company, we will not be entitled to the exemptions provided in the JOBS Act discussed above.Item 16H. Mine Safety DisclosureNot applicable. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 138 of 194 Table of Contents137PART IIIItem 18. Financial StatementsThe audited Consolidated Financial Statements as required under Item 18 are attached hereto starting on page F-1 of this annual report on Form 20-F.Item 19. ExhibitsA list of exhibits included as part of this annual report on Form 20-F is set forth in the Index to Exhibits immediately following this Item 19. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 139 of 194 Table of Contents138INDEX TO EXHIBITSExhibit No. Exhibit Description1.1†Fourth Amended and Restated Memorandum and Articles of Association of the Registrant 2.1†Description of the registrant’s securities registered pursuant to Section 12 of the Exchange Act. 2.2†Specimen American Depositary Receipt (contained in Exhibit 2.4) 2.3†Specimen Form of Class A Ordinary Share Certificate 2.4†Form of Deposit Agreement, among the Registrant, the depositary and the holders and beneficial owners of American DepositaryShares issued thereunder 2.5†Form of Registration Rights Agreement 3.1†Form of Irrevocable Voting Proxy by and among holders of options awarded under the 2018 Share Incentive Plan and the 2019Performance Incentive Plan and Wu Tianhua 4.1†† English translation of Exclusive Business Cooperation Agreement between Ningxia Rongke and Ningxia Yixin dated June 7,2018 4.2†English translation of Exclusive Option Contract among Ningxia Yixin, shareholders of Ningxia Rongke and Ningxia Rongkeedated December 17, 2018, which restated and amended the version dated June 7, 2018 4.3†English translation of Equity Pledge Contract among Beijing Bohu, shareholders of Beijing xiangshang Rongke and Beijingxiangshang Rongke dated April 13, 2021, which replaced the version dated June 7, 2018 4.4†English translation of the Power of Attorney by Ningxia Yixin and shareholders of Ningxia Rongke dated December 17, 2018,which restated and amended the version dated June 7, 2018 4.5†English translation of the form of Spouse Consent Letter by the spouse of each married shareholder of Ningxia Rongke 4.6†English translation of Exclusive Business Cooperation Agreement between Beijing Yixin and Beijing Yiyi dated October 30, 2018 4.7†English translation of Exclusive Option Contract among Beijing Yixin, shareholders of Beijing Yiyi and Beijing Yiyi datedOctober 30, 2018 4.8†English translation of Equity Pledge Contract among Beijing Yixin, shareholders of Beijing Yiyi and Beijing Yiyi datedOctober 30, 2018 4.9†English translation of the Power of Attorney between Beijing Yixin and shareholders of Beijing Yiyi dated October 30, 2018 4.10†English translation of the form of Spouse Consent Letter by the spouse of each married shareholder of Beijing Yiyi 4.11†Form of Employment Agreement between the Registrant and its executive officers 4.12†Form of Indemnification Agreement between the Registrant and its directors and executive officers 4.13†Consolidated Clearing Agreement between IB LLC and Top Capital Partners Limited  Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 140 of 194 Table of Contents1394.14†Fully Disclosed Clearing Agreement between IB LLC and Top Capital Partners Limited 4.15†English translation of the Lease Contract of Grandyvic Building for the registrant’s Beijing office 4.16†Subscription Agreement by and between the Registrant and IB Global Investments LLC dated March 8, 20194.17†UP Fintech Holding Limited Share Incentive Plan adopted in June 2018 and amended in December 2018 4.18†UP Fintech Holding Limited 2019 Performance Incentive Plan 8.1 List of principal subsidiaries and consolidated affiliated entities of the Registrant 11.1†Code of Business Conduct and Ethics 12.1 Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer 12.2 Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer 13.1 Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of theSarbanes-Oxley Act of 2002. 13.2 Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of theSarbanes-Oxley Act of 2002. 15.1 Consent of KPMG Huazhen LLP Certified Public Accountants 15.2Consent of Deloitte Touche Tohmatsu Certified Public Accountants15.3Letter of Deloitte Touche Tohmatsu Certified Public Accountants to the Securities and Exchange Commission, dated April 27,202115.4The registrant hereby agrees to furnish to the SEC, upon request, copies of instruments defining the rights of holder of long-termdebt of the registrant and its consolidated subsidiaries and for any of its unconsolidated subsidiaries for which financial statementsare required to the filed.101.INS Inline XBRL Instance Document 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Labels Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document104*Cover Page Interactive Data File (embedded within the Inline XBRL document)† Previously filed Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 141 of 194 Table of Contents140SIGNATUREThe registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and has duly caused and authorized the undersigned tosign this annual report on its behalf.UP FINTECH HOLDING LIMTED/s/ Tianhua WuName: Tianhua WuTitle: Chief Executive Officer and DirectorDated: April 27, 2021 Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 142 of 194 Table of ContentsF-1INDEX TO CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED DECEMBER 31, 2018, 2019 and 2020CONTENTSPAGE(S)REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMSF-2&3CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2019 AND 2020F-4CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) FOR THE YEARS ENDED DECEMBER 31,2018, 2019 AND 2020F-5CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT) FOR THE YEARS ENDEDDECEMBER 31, 2018, 2019 AND 2020F-7CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018, 2019 AND 2020F-8NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2018, 2019 AND2020F-10 – F-53 Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 143 of 194 Table of ContentsF-2REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Board of Directors and shareholders of UP Fintech Holding LimitedOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of UP Fintech Holding Limited and its subsidiaries (the “Company”) as ofDecember 31, 2019, and the related consolidated statements of operations, comprehensive loss, change in shareholders’ (deficit) equity and cashflows for each of the two years in the period ended December 31, 2019, and the related notes (collectively referred to as the “financial statements”).In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and2019, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2019, in conformity withaccounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’sfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (UnitedStates) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and theapplicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is notrequired to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required toobtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of theCompany’s internal control over financial reporting. Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud,and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts anddisclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for ouropinion./s/ Deloitte Touche Tohmatsu Certified Public Accountants LLPDeloitte Touche Tohmatsu Certified Public Accountants LLPBeijing, the People’s Republic of ChinaApril 29, 2020We have served as the Company’s auditor since 2018. In 2020, we became the predecessor auditor. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 144 of 194 Table of ContentsF-3REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Shareholders and Board of DirectorsUP Fintech Holding Limited:Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheet of UP Fintech Holding Limited and its subsidiaries (the Company) as of December31, 2020, the related consolidated statements of comprehensive income (loss), changes in equity (deficit), and cash flows for the year endedDecember 31, 2020, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statementspresent fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cashflows for the year ended December 31, 2020, in conformity with U.S. generally accepted accounting principles.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on theseconsolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting OversightBoard (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securitieslaws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. TheCompany is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, weare required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on theeffectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to erroror fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding theamounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significantestimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our auditprovides a reasonable basis for our opinion./s/ KPMG Huazhen LLPWe have served as the Company’s auditor since 2020.Beijing, ChinaApril 27, 2021 Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 145 of 194 Table of ContentsF-4UP FINTECH HOLDING LIMITEDCONSOLIDATED BALANCE SHEETS(All amounts in U.S. dollars (“US$”), except for share, per share and per data, or otherwise noted)As of December 31, 2019 2020 US$ US$Assets: Cash and cash equivalents 59,408,555 79,652,897Cash—segregated for regulatory purpose 317,915,092 867,946,754Term deposits 65,601,207 18,698,143Receivables from customers (net of allowance of nil and US$ 91,788 as of December 31, 2019 and 2020) 106,113,896 372,215,645Receivables from brokers, dealers, and clearing organizations (net of allowance of nil as of December 31, 2019 and 2020): Related parties185,047,211764,318,932Others9,274,20532,547,428Financial instruments held, at fair value 14,881,240 562,536Prepaid expenses and other current assets 8,020,192 11,214,430Amounts due from related parties 3,484,434 5,065,222Total current assets769,746,0322,152,221,987Right-of-use assets5,732,5597,280,763Property, equipment and intangible assets, net 9,535,541 9,693,034Goodwill2,421,4032,421,403Long‑term investments 6,017,219 6,480,951Other non-current assets 3,045,732 4,299,246Deferred tax assets 12,561,461 9,919,967Total assets 809,059,947 2,192,317,351Liabilities: Payables to customers 512,481,679 1,696,164,267Payables to brokers, dealers and clearing organizationsRelated parties53,774,882218,574,120Others1,355,1125,135,941Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of the consolidated VIEs without recourse to the Group ofUS$9,267,717 and US$12,345,185 as of December 31, 2019 and 2020, respectively) 16,881,957 27,138,201Deferred income - current697,330844,558Lease liabilities - current (including lease liabilities - current of the consolidated VIEs without recourse to the Group of US$1,097,916 and US$1,743,537 as ofDecember 31, 2019 and 2020, respectively)2,401,5663,514,592Total current liabilities587,592,5261,951,371,679Deferred income – non-current1,552,5951,565,843Lease liabilities – non-current (including lease liabilities – non-current of the consolidated VIEs without recourse to the Group of US$100,701 and US$1,158,044 asof December 31, 2019 and 2020, respectively)3,440,0923,692,701Deferred tax liabilities1,449,000—Total liabilities 594,034,213 1,956,630,223Commitments and Contingencies (Note 17) Mezzanine equity: Redeemable non‑controlling interest of sponsored fund 3,084,122 —Total mezzanine equity 3,084,122 —Shareholders’ equity (deficit): Class A ordinary shares (US$0.00001 par value; 4,662,388,278 and 4,662,388,278 shares authorized as of December 31, 2019 and 2020 respectively; 1,777,218,449and 1,794,357,434 shares issued and outstanding as of December 31, 2019 and 2020, respectively)17,772 17,944Class B ordinary shares (US$0.00001 par value; 337,611,722 shares authorized as of December 31, 2019 and 2020 , 337,611,722 issued and outstanding as ofDecember 31, 2019 and 2020)3,376 3,376Additional paid‑in capital 285,767,622 291,827,379Statutory reserve724,0082,663,551Accumulated deficit (73,704,745) (59,579,495)Treasury stock (nil and 10,429,305 shares as of December 31, 2019 and 2020, respectively) — (2,172,819)Accumulated other comprehensive income (loss) (866,421) 2,927,192Total UP Fintech Holding Limited shareholder’s equity 211,941,612 235,687,128Total liabilities, mezzanine equity and equity 809,059,947 2,192,317,351The accompanying notes are an integral part of these consolidated financial statements. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 146 of 194 Table of ContentsF-5UP FINTECH HOLDING LIMITEDCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted) For the years ended December 31, 2018 2019 2020 US$ US$ US$Revenues(a): Commissions 26,043,051 26,697,958 77,628,521Interest related incomeFinancing service fees 6,442,012 7,926,766 6,576,622Interest income 85,361 16,505,185 31,754,541Other revenues 989,841 7,532,991 22,537,006Total revenues 33,560,265 58,662,900 138,496,690Interest expense(a)—(4,101,528)(10,102,290)Total Net Revenues33,560,26554,561,372128,394,400Operating cost and expenses:Execution and clearing(a) (257,115) (2,519,238) (12,645,113)Employee compensation and benefits (including share-based compensation of US$34,204,761, US$4,062,600 andUS$6,054,612 for the years ended December 31, 2018, 2019 and 2020, respectively) (55,656,219) (35,787,458) (50,039,073)Occupancy, depreciation and amortization (2,621,699) (3,572,260) (4,735,881)Communication and market data (3,558,546) (6,494,006) (10,320,505)Marketing and branding(a) (10,526,940) (7,103,178) (15,871,777)General and administrative(a) (7,831,860) (9,259,484) (13,748,818)Total operating cost and expenses (80,452,379) (64,735,624) (107,361,167)Other income:Others, net 725,446 869,028 996,559Income (loss) before income taxes (46,166,668) (9,305,224) 22,029,792Income tax benefit (expense) 1,873,113 3,355,366 (2,850,547)Net income (loss) (44,293,555) (5,949,858) 19,179,245Less:Net income attributable to redeemable non-controlling interests—639,5733,114,452Net loss attributable to non-controlling interests (1,085,823) — —Net income (loss) attributable to ordinary shareholders of UP Fintech Holding Limited (43,207,732) (6,589,431) 16,064,793Net income (loss) per share attributable to ordinary shareholders of UP Fintech Holding Limited:Basic (0.09) (0.00)0.01Diluted(0.09)(0.00)0.01Weighted average shares used in calculating net income (loss) per ordinary share:Basic 506,393,1981,751,784,1762,117,904,025Diluted506,393,1981,751,784,1762,162,232,325Other comprehensive income (loss), net of tax: Unrealized gain on available-for-sale securities (net of tax effect of US$87,619, nil and US$6,284 for the years endedDecember 31, 2018, 2019 and 2020, respectively)262,857—41,149Change in cumulative foreign currency translation adjustment(935,612)(321,433)3,752,464Total Comprehensive income (loss)(44,966,310)(6,271,291)22,972,858Total Comprehensive income (loss) attributable to non-controlling interests(1,085,823)——Total Comprehensive income (loss) attributable to redeemable non-controlling interests—639,5733,114,452Total Comprehensive income (loss) attributable to ordinary shareholders of UP Fintech Holding Limited(43,880,487)(6,910,864)19,858,406 Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 147 of 194 Table of ContentsF-6(a)Includes the following revenues, costs and expenses resulting from transactions with related parties for the year ended December 31, 2020(note 14):For the Year Ended December 31, 2020US$Revenues:Commissions35,559,807Interest related incomeFinancing service fees6,576,622Interest income21,966,305Other revenues8,014,524Interest expense(9,316,150)Execution and clearing(7,150,700)Marketing and branding(397,590)General and administrative(700,000)The accompanying notes are an integral part of these consolidated financial statements. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 148 of 194 Table of ContentsF-7UP FINTECH HOLDING LIMITEDCONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)FOR THE YEARS ENDED DECEMBER 31, 2018, 2019 AND 2020 Series Angel equity interest with Series Angel Accumulated RedeemablePaid‑in preferentialClass A ordinaryClass B ordinaryconvertibleAdditional otherNon‑Total non‑controllingcapital rightssharessharesTreasury stock purchasespreferred shares paid‑inStatutorycomprehensiveAccumulatedcontrollingshareholders’interest of Amount Amount Shares Amount Shares Amount SharesAmount Shares Amount capital Reserves income (loss) deficit interests equity (deficit) sponsored fund US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$Balance as of January 1, 2018 357,338 496,584 — — — — ——— — 7,291,855 — 206,734 (23,183,574) (464,878) (15,295,941) —Reorganization effect (note ) (357,338) (496,584) 33,170,968 332 410,643,948 4,106 ——419,736,104 4,197 845,287 — — — — — —Issuance of class A ordinary shares — — 2,480,000 25 — — ——— — 178,429 — — — — 178,454 —Issuance of class B ordinary shares — — — — 107,863,347 1,079 ——— — — — — — — 1,079 —Class B ordinary shares convertedinto Class A ordinary shares— — 180,895,573 1,809 (180,895,573) (1,809) ——— — — — — — — — —Share-based compensation— — — — — — ——— — 34,204,761 — — — — 34,204,761 —Foreign currency translationadjustment— — — — — — ——— — — — (1,014,579) — 78,967 (935,612) —Unrealized gain on available-for-sale securities— — — — — — ——— — — — 262,857 — — 262,857 —Investment in sponsored fund fromnon-controlling shareholders— — — — — — ——— — — — — — — — 2,204,940Net loss — — — — — — ——— — — — — (43,207,732) (1,085,823) (44,293,555) —Balance as of December 31, 2018 — — 216,546,541 2,166 337,611,722 3,376 ——419,736,104 4,197 42,520,332 — (544,988) (66,391,306) (1,471,734) (25,877,957) 2,204,940Issuance of Class A ordinary sharesupon initial public offering, netof offering costs ofUS$3,462,099 — — 237,375,000 2,373 — — ——— — 114,763,528 — — — — 114,765,901 —Conversion of convertible preferredshares to Class A ordinaryshares upon initial publicoffering — — 1,229,518,986 12,295 — — ——(419,736,104) (4,197) 122,692,824 — — — — 122,700,922 —Issuance of Class A ordinary sharesin relation to the acquisition ofMarsco Investment Corporation — — 8,508,390 85 — — ——— — 2,999,915 — — — — 3,000,000 —Issuance of Class A ordinary sharesupon settlement of share-basedawards — — 85,269,532 853 — — ——— — 200,157 — — — — 201,010 —Share-based compensation — — — — — — ——— — 4,062,600 — — — — 4,062,600 —Provision of statutory reserve — — — — — — ——— — — 724,008 — (724,008) — — —Foreign currency translationadjustment — — — — — — ——— — — — (321,433) — — (321,433) —Acquisition of additional equityinterest from non-controllingshareholders — — — — — — ——— — (1,471,734) — — — 1,471,734 — —Investment in sponsored fund fromnon-controlling shareholders— ———————————————239,609Net income (loss) — — — — — — ——— — — — — (6,589,431) — (6,589,431) 639,573Balance as of December 31, 2019 — — 1,777,218,449 17,772 337,611,722 3,376 ——— — 285,767,622 724,008 (866,421) (73,704,745) — 211,941,612 3,084,122Issuance of Class A ordinary sharesupon settlement of share-basedawards— — 17,138,985 172 — — ——— — 5,145 — — — — 5,317 —Share-based compensation— — — — — — ——— — 6,054,612 — — — — 6,054,612 —Treasury stock purchases 10,429,305(2,172,819) (2,172,819) Provision of statutory reserve— — — — — — ——— — — 1,939,543 — (1,939,543) — — —Foreign currency translationadjustment — — — — — — ——— — — — 3,752,464 — — 3,752,464 —Unrealized gain on available-for-sale securities————————————41,149——41,149—Investment in sponsored fund fromnon-controlling shareholders — — — — — — ——— — — — — — — — 4,251,549Disposal of sponsored fund fromnon-controlling shareholders ——————————— ———— — (10,450,123)Net income —— — — — — ——— — — — — 16,064,793 — 16,064,793 3,114,452Balance as of December 31, 2020 — — 1,794,357,434 17,944 337,611,722 3,376 10,429,305(2,172,819)— — 291,827,379 2,663,551 2,927,192 (59,579,495) — 235,687,128 —Note: Represents the reorganization transactions to re-domicile the Company’s business from the People’s Republic of China (the “PRC”) to the Cayman Islands asdescribed in Note 1.The accompanying notes are an integral part of these consolidated financial statements. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 149 of 194 Table of ContentsF-8UP FINTECH HOLDING LIMITEDCONSOLIDATED STATEMENTS OF CASH FLOWS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted) For the years ended December 31, 2018 2019 2020 US$ US$ US$Cash flows from operating activities: Net income (loss) (44,293,555) (5,949,858) 19,179,245Adjustments to reconcile net income (loss) to net cash (used in)/provided by operating activities: Share-based compensation 34,204,761 4,062,600 6,054,612Depreciation and amortization 473,730 752,167 928,414Unrealized fair value change of financial instruments held, at fair value (215,446) (1,659,469) (6,281)Gain on disposal of subsidiaries—(467,500)—Loss from equity investments, including impairments — 755,524 191,603Allowance for doubtful accounts——91,788Loss on disposal of property and equipment—34,467119,136Foreign currency exchange loss (gain) (542,336) (284,153) 2,918,701Deferred tax (benefit) expense (1,874,819) (6,215,140) 1,772,670Changes in operating assets and liabilities: Financial instruments held, at fair value (6,219,795) (6,627,630) 14,324,985Receivables from customers (353,304) (101,438,442) (266,193,537)Receivables from brokers, dealers and clearing organizations(a) 1,128,931 (183,103,763) (602,544,944)Amounts due from related parties (10,390,564) 401,748 (390,683)Prepaid expenses and other current assets (3,543,158) (1,259,888) (3,531,256)Right-of-use assets—2,251,301(1,548,204)Other non-current assets — (435,614) (130,244)Payables to customers 5,316,263 481,105,480 1,183,682,588Payables to brokers, dealers and clearing organizations(a)—55,078,762168,580,067Accrued expenses and other current liabilities 5,137,692 6,200,824 10,256,244Lease liabilities—(2,142,202)1,365,635Deferred income—2,249,925160,476Net cash (used in)/ provided by operating activities (21,171,600) 243,309,139 535,281,015Cash flows from investing activities: Purchase of property, equipment and intangible assets (1,684,382) (1,317,435) (978,142)Prepayment for acquisition and long-term investments subject to certain closing conditions—(854,891)—Payment for long-term investments — (600,000) —Cash paid for acquisition, net of cash acquired—(6,008,680)—Cash-segregated for regulatory purpose acquired from acquisition — 22,094,198 —Repayment of loans from related parties 1,793,993 1,585,591 —Cash received from disposal of a subsidiary—106,105—Purchase of term deposits (29,999,865) (65,601,207) (31,449,568)Maturity of term deposits—29,999,86578,374,132Advances to employees—(1,154,938)(1,462,052)Loans to related parties (5,233,963) (288,719) (928,751)Net cash (used in)/provided by investing activities (35,124,217) (22,040,111) 43,555,619Cash flows from financing activities: Proceeds received from issuance of Class A ordinary shares 178,454 — —Proceeds received from issuance of Class B ordinary shares 1,079 — —Proceeds received from issuance of Series B-3 convertible redeemable preferred shares 19,961,472 — —Proceeds received from issuance of Series C convertible redeemable preferred shares 47,180,000 800,000 —Proceeds received from issuance of Series C-1 convertible redeemable preferred shares 10,000,000 — —Net proceeds received from initial public offering (net of offering cost of US$3,462,099)—114,765,901—Proceeds received from issuance of Class A Ordinary Shares upon settlement of share-based awards—201,0105,317Capital contribution in sponsored fund from redeemable non-controlling interest 2,204,940 239,609 4,251,549Payment to Redeemable non-controlling interest due to disposal of sponsored fund — — (10,450,123)Repayment of loans to bank—(1,100,000)—Purchases of treasury stock — — (2,172,819)Net cash provided by/(used in) financing activities 79,525,945 114,906,520 (8,366,076)Increase in cash,cash equivalents and restricted cash 23,230,128 336,175,548 570,470,558Effect of exchange rate changes (189,163) 45,693 (194,554)Cash, cash equivalents and restricted cash at beginning of the year 18,061,441 41,102,406 377,323,647Cash, cash equivalents and restricted cash at end of the year 41,102,406 377,323,647 947,599,651Cash, cash equivalents and restricted cash:Cash and cash equivalents34,406,97059,408,55579,652,897Cash-segregated for regulatory purpose6,695,436317,915,092867,946,754Supplemental disclosure of cash flow information: Income taxes paid — 762,179 266,269Acquisition consideration paid—6,348,290—Non-cash investing activity: Loan converted to long‑term investment — 3,846,699 —Prepayment converted to long-term investment and loans to related parties — — 654,891 Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 150 of 194 Table of ContentsF-9(a)Includes the following changes in operating assets and liabilities resulting from transactions with related parties for the year endedDecember 31, 2020: For the year endedDecember 31, 2020US$Cash flows from operating activities:Changes in operating assets and liabilities:Receivables from brokers, dealers and clearing organizations(579,271,721)Payables to brokers, dealers and clearing organizations164,799,238The accompanying notes are an integral part of these consolidated financial statements. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 151 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-101. ORGANIZATION AND PRINCIPAL ACTIVITIESUP Fintech Holding Limited (the “Company”) was incorporated under the laws of Cayman Islands on January 26, 2018. The Company, itssubsidiaries, its consolidated variable interest entities (“VIEs”) and VIEs’ subsidiaries (collectively, the “Group”) are primarily engaged inproviding online brokerage services.As of December 31, 2020, details of the Group’s major principal operating subsidiaries, VIEs and VIEs’ subsidiaries were as follows: Date of Place of Percentage of incorporation or establishment/ legal acquisition incorporation ownershipSubsidiaries: Tiger Brokers (NZ) Limited (“TBNZ”)August 02, 2016 New Zealand 100%Up Fintech International Limited (“Up International”)February 08, 2018 Hong Kong 100%Tiger Fintech (Singapore) PTE Ltd. (“Tiger SG”)March 13, 2018 Singapore 100%Tiger Brokers (Singapore) PTE Ltd. (“Tiger Brokers SG”)March 27, 2018 Singapore 100%US Tiger Securities, Inc. (“US Tiger Securities”)March 30, 2018 United States of America(“USA”) 100%Beijing Bohu Xiangshang Technology Co.,LTD (“Beijing BHXS”, “Ningxia WFOE”)1May 17, 2018 PRC 100%Tiger Fintech Holdings, Inc (“Tiger Fintech Holdings”)July 09, 2018 USA 100%Beijing Xiangshang Yixin Technology Co., Ltd (“Beijing Yixin”, “Beijing WFOE”)July 26, 2018 PRC 100%Trading Front Inc (“Trading Front”)August 01, 2018 USA 100%Wealthn LLC (“Wealthn”)August 01, 2018 USA 100%Kastle Limited (“Kastle”)October 15, 2018 Hong Kong 100%Tung Chi Consulting Limited (“Tung Chi”)January 29, 2019Hong Kong100%Marsco Investment Corporation (“Marsco”)July 12, 2019USA100%Tradeup Inc. (“Tradeup”)October 10, 2019USA100%Hangzhou U-Tiger Technology Co. LTDApril 09,2020PRC100%VIEs: Ningxia Xiangshang Rongke Technology Co.,LTD (“Ningxia Rongke”, “Ningxia VIE”)June 11, 2014 PRC Consolidated VIEBeijing Xiangshang Yiyi Laohu Technology Group Co.,LTD (“Beijing Yiyi”, “Beijing VIE”)October 29, 2018 PRC Consolidated VIEVIEs’ subsidiaries: Tiger Technology Corporation Limited (“Tiger Technology”)October 14,2014 Hong Kong VIE’s subsidiaryTiger Holdings, LLC (“Tiger LLC”)October 13, 2015 USA VIE’s subsidiaryBeijing U‑Tiger Network Technology Co., LTD (“Beijing U‑Tiger Network”)April 20, 2016 PRC VIE’s subsidiaryBeijing U‑Tiger Business Service Co., Ltd (“Beijing U‑Tiger Business”)April 21,2016 PRC VIE’s subsidiaryBeijing Chenhao Technology Co., LTD. (“Beijing Chenhao”)August 11, 2016 PRC VIE’s subsidiaryBeijing Zhijianfengyi Information Technology Co., Ltd (“Beijing ZJFY”)January 25, 2018 PRC VIE’s subsidiaryShenzhen Xiang Shang Hu Xun Technology Co., LTD (“HuXun”)June 20, 2018 PRC VIE’s subsidiaryBeijing Huyi Technology Co., Ltd (“Huyi”)September 05, 2018 PRC VIE’s subsidiaryGuangzhou U-Tiger Technology Co.,LTD (“Guangzhou U-Tiger”)December 24, 2018PRCVIE’s subsidiary1 In December 2020, the name of “Ningxia Xiangshangyixin Technology Co., Ltd” was changed to “Beijing Bohu Xiangshang Technology Co.,LTD”.History of the Group and reorganization under identical common ownershipThe Group’s history began in June 2014 with the commencement of operations of Ningxia Rongke, as a limited liability company in PRCincorporated by Mr. Tianhua, Wu, Chief Executive Officer (the “CEO”). From December 2014 to January 2017, after the incorporation of theNingxia Rongke, series Angel, A, B, B+ investors (collectively, the “equity investors”) each acquired certain equity interest with preferential rightsof Ningxia Rongke.In June 2018, the Company undertook a series of reorganization transactions to re-domicile its business from the PRC to the Cayman Islands(the “Re-domiciliation”). The main purpose of the Re-domiciliation was to establish a Cayman holding company for the existing business inpreparation for its overseas initial public offering. At the same shareholding percentages and the rights of each shareholder were substantially thesame in Ningxia Rongke and the Company, the Re-domiciliation was accounted for as a reorganization of entities under common ownership. As aresult, Ningxia Rongke’s historical financial information was consolidated in the consolidated financial statements of the Group since the beginningof the periods presented. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 152 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-111. ORGANIZATION AND PRINCIPAL ACTIVITIES (Continued)The VIE arrangementsTo provide the Company control over the VIEs and the rights to the expected residual returns of the VIEs and VIEs’ subsidiaries, on June 7, 2018,Ningxia WFOE, entered into a series of contractual arrangements as described below, and as amended on December 17, 2018, with the NingxiaRongke and its equity investors. On October 30, 2018, Beijing WFOE entered into a series of substantially same contractual arrangements withBeijing Yiyi.As a result of entering into these contractual agreements, the Company through its wholly owned subsidiaries, Ningxia WFOE and Beijing WFOE(the “WOFEs”), has (1) power to direct the activities of the VIEs that most significantly affect the entities’ economic performance and (2) the rightto receive economic benefits of the VIEs that could be significant to the VIEs. Accordingly, The Company is considered the primary beneficiary ofthe VIEs and consolidate the VIEs’ financial results of operations, assets, and liabilities in the Company’s consolidated financial statements. TheCompany also believes that this ability to exercise control ensures that the VIEs will continue to execute and renew the exclusive businesscooperation agreements and pay service fees to the Company. The ability to charge service fees in amounts determined at the Company’s solediscretion, and by ensuring that the exclusive business cooperation agreements are executed and renewed indefinitely, the Company has the right toreceive substantially all of the economic benefits from the VIEs.Agreements that were entered to provide the Company effective control over the VIEsExclusive Option Agreements. The respective equity investors of the VIEs entered into Exclusive Option Agreements with the WFOEsrespectively, pursuant to which the equity investors of the VIEs grant the WFOEs an irrevocable and exclusive right to purchase or designate one ormore persons to purchase the equity interests in the VIEs then held by the equity investors of the VIEs once or at multiple times at any time in partor in whole at the WFOEs’ sole and absolute discretion to the extent permitted by PRC laws. The standard equity interest purchase price is RMB10(US$1.5). If a minimum price limited by PRC law applicable is more than RMB10 (US$1.5), the purchase price of the equity interest shall equalsuch minimum price. The agreement shall remain effective for a term of ten years and renewable at the WFOEs’ election.Powers of Attorney. The equity investors of the VIEs signed the irrevocable Powers of Attorney to appoint the WFOEs as the attorney-in-fact toact on the equity investors’ behalf on all rights that the equity investors have in respect of their equity interest in the VIEs conferred by relevantlaws and regulations and the articles of association of the VIEs. The rights include but not limited to attending shareholders meeting, exercisingvoting rights, designating and appointing on behalf of the equity investors, the legal representative (chairperson), the director, supervisor, the chiefexecutive officer and other senior management members of the VIEs. Powers of attorney are coupled with an interest and shall be irrevocable andcontinuously valid from the date of execution of the Powers of Attorney.Spousal Consent letters. The spouse of each married equity investors of the VIEs has signed a spousal consent letter, which unconditionally andirrevocably agreed not to assert any rights over the equity interest in the VIEs held by and registered in the name of their spouse. In addition, in theevent that the spouse obtains any equity interest in the VIEs for any reason, they agreed to be bound by the contractual arrangements.Commitment letters. The respective equity investors of the VIEs entered into Commitment letters with the WFOEs respectively. The equityinvestors of the VIEs undertake that, when exercising their options, they will refund, without any conditions, any amount and fees to the WFOEswhich exceed the share purchase price provided in the Exclusive Option Agreements. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 153 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-121. ORGANIZATION AND PRINCIPAL ACTIVITIES (Continued)Agreements that were entered to transfer economic benefits to the CompanyExclusive Business Cooperation Agreements. The WFOEs entered into Exclusive Business Cooperation Agreements with the VIEs and theirequity investors. Under the agreements, VIEs agree to appoint the WFOEs as their exclusive services provider to provide the business support,technical and consulting services at a determined price. The WFOEs shall have exclusive and proprietary rights and interests in all rights,ownership, interests and intellectual properties arising out of or created during the performance of the agreement. The annual service fee should notbe less than 99% of VIEs’ total net profit and could be decided and adjusted by the WFOEs. The service agreements shall remain effective forten years. The WFOEs has the right to unilaterally extend the agreement and the VIEs shall accept the extended term unconditionally.Equity Pledge Agreements. The equity investors of the VIEs entered into Equity Pledge Agreements with the WFOEs, under which the equityinvestors pledged all of the equity interest in the VIEs to the WFOEs to ensure that the WFOEs collect all payments due by the VIEs, includingwithout limitation the consulting and service fees regularly from the VIEs under the Exclusive Business Cooperation Agreements. The WFOEsshall have the right to collect dividends generated by the equity interest during the term of pledge. If any event of default, the WFOEs, as thepledgee, will be entitled to take possession of the equity interest pledged and to dispose of the pledged equity interest. The Equity PledgeAgreements remain continuously valid until all payments due under the Exclusive Business Cooperation Agreements have been fulfilled bythe VIEs.Risks in relation to the VIE structureThe Company believes that the WFOEs’ contractual arrangements with the VIEs and their respective subsidiaries are in compliance with PRC lawsand are legally enforceable. The equity investors of the VIEs are also major shareholders of the Company and therefore have no current interest inseeking to act contrary to the contractual arrangements. However, uncertainties in the PRC legal system could limit the Company’s ability toenforce these contractual arrangements and if the shareholders were to reduce their interest in the Company, their interests may diverge from that ofthe Company and that may potentially increase the risk that they would seek to act contrary to the contractual terms, for example by influencing theVIEs not to pay the service fees when required to do so.The Company’s ability to control the VIEs also depends on the Powers of attorney. The WFOEs have to vote on all matters requiring shareholders’approval in the VIEs. As noted above, the Company believes this Powers of attorney is legally enforceable but may not be as effective as directequity ownership.The shareholders are required to complete the registration of the equity pledge under the agreements with competent government authorities. Incase any of the shareholders is in breach, the WFOEs will be entitled to certain right, including the right to dispose the pledged equity interest andto receive proceeds from the auction or sale of the pledge equity interests. The Company has completed the registration of the equity pledgesrelating to the VIEs with the local government authorities.In addition, if the legal structure and contractual arrangements were found to be in violation of any existing PRC laws and regulations, the PRCregulatory authorities could:●revoke the Group’s business and operating licenses;●require the Group to discontinue or restrict its operations;●restrict the Group’s right to collect revenues; Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 154 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-131. ORGANIZATION AND PRINCIPAL ACTIVITIES (Continued)Risks in relation to the VIE structure (Continued)●restrict or prohibit the Group to finance its business and operations in China;●require the Group to restructure the operations;●impose additional conditions or requirements with which the Group might not be able to comply, levy fines, confiscate the Group’sincome or the income of its PRC subsidiary or affiliated PRC entities; or●take other regulatory or enforcement actions against the Group that could be harmful to its business.The imposition of any of these penalties could result in a material adverse effect on the Group’s ability to conduct the Group’s business. Inaddition, if the imposition of any of these penalties causes the Group to lose the rights to direct the activities of the VIEs, VIEs’ subsidiaries, or theright to receive their economic benefits, the Group would no longer be able to consolidate the VIEs and VIEs’ subsidiaries. The Group does notbelieve that any penalties imposed or actions taken by the PRC government would result in the liquidation or dissolution of the Company, theWFOEs, the VIEs and their respective subsidiaries.The following financial statement amounts and balances of the VIEs were included in the accompanying consolidated financial statements after theelimination of intercompany transaction and balances within the Group: As of December 31, 2019 2020 US$ US$Current assets 11,412,715 10,000,576Non-current assets 5,838,056 16,253,658Total assets 17,250,771 26,254,234Current liabilities 10,365,633 14,088,722Non-current liabilities100,7011,158,044Total liabilities 10,466,334 15,246,766 For the years ended December, 31 2018 2019 2020 US$ US$ US$Total revenues 27,536,436 3,089,605 2,625,883Net loss (4,948,406) (24,539,413) (21,090,334) For the years ended December, 31 2018 2019 2020 US$ US$ US$Net cash provided by operating activities 3,768,318 33,354,051 26,964,708Net cash used in investing activities (2,456,147) (726,601) (353,353)Net cash used in financing activities (1,509,434) — —The VIEs contributed an aggregate of 82%, 6% and 2% of the consolidated revenues for the years ended December 31, 2018, 2019 and 2020,respectively. As of December 31, 2019 and 2020, the VIEs accounted for an aggregate of 2% and 1%, respectively, of the consolidated total assets,and 2% and 1%, respectively, of the consolidated total liabilities. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 155 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-141. ORGANIZATION AND PRINCIPAL ACTIVITIES (Continued)Risks in relation to the VIE structure (Continued)There are no consolidated VIEs’ assets that are collateralized for the VIEs’ obligations and can only be used to settle the VIEs’ obligations. Thereare no creditors (or beneficial interest holders) of the VIEs that have recourse to the general credit of the Company or any of its consolidatedsubsidiaries. There are no terms in any arrangements, considering both explicit arrangements and implicit variable interests that require theCompany or its subsidiaries to provide financial support to the VIEs. However, if the VIEs ever need financial support, the Company or itssubsidiaries may, at its option and subject to statutory limits and restrictions, provide financial support to its VIEs through loans to the shareholdersof the VIEs or entrustment loans to the VIEs.Relevant PRC laws and regulations restrict the VIEs from transferring a portion of their net assets, equivalent to the balance of their statutoryreserve and their share capital, to the Company in the form of loans and advances or cash dividends. Please refer to Note 20 for disclosure ofrestricted net assets.2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of presentation and principle of consolidationThe consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the UnitedStates of America (“U.S. GAAP”). The consolidated financial statements of the Group include the financial statements of the Company, its wholly-owned subsidiaries, its VIEs and the VIEs' subsidiaries. The Company believes that the disclosures are adequate to make the information presentednot misleading.Consolidation of a sponsored fundThe Company has a trust that develops and holds an exchange-trade fund (the “sponsored fund”) that is publicly traded from the Nasdaq GlobalSelect Market. The fund is managed by a subsidiary of the Company. Decisions regarding the trustees of the trust and certain key activities ofthe sponsored fund within the trust, such as appointment of the sponsored fund’s investment adviser, resides at the trust level. As a result,shareholders of the sponsored fund lack the ability to control the key decision-making processes that most significantly affect the economicperformance of the sponsored fund. Accordingly, the Company believes that the trust and the sponsored fund are variable interest entities (“VIEs”)and shall be evaluated for consolidation as VIEs.The Company provides seed funding to new sponsored fund and may hold a significant interest in the shares of a sponsored fund during the seedinvestment stage when the sponsored fund’s investment track record is being established. To the extent that the Company’s interest in a sponsoredfund is limited to: (i) fixed management fee and (ii) other interests that, in aggregate, would absorb an insignificant amount of variability in thefund, the Company’s management contract would not be considered a variable interest that provides the Company with the power to direct theactivities of the fund and would therefore not be required to consolidate the fund. However, the Company has concluded that its fees earned fromasset management arrangement with sponsored fund in which the Company holds a significant (at least 10 percent) ownership interest in the funddo represent variable interests that convey both power, in combination with the ownership interest, and significant economic exposure (bothcharacteristics of a controlling financial interest) to the Company and therefore the Company would be the primary beneficiary that required toconsolidate the fund. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 156 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-152. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)Consolidation of a sponsored fund (Continued)Upon consolidation, management fee revenue earned on, as well as the Company’s investments in, the consolidated sponsored funds areeliminated. The Company retains the specialized accounting treatment of the sponsored fund in consolidation whereby the underlying investmentsare carried at fair value, reflected in financial instruments held, at fair value, in the Company’s consolidated balance sheets, with correspondingchanges in fair value reflected in others, net in the Company’s consolidated statements of comprehensive income (loss). The non-controllinginterest represents third-party interests of the Company's consolidated sponsored fund. This interest is redeemable at the option of the investors andtherefore is recorded as mezzanine equity. Redeemable non-controlling interest is recorded at redemption value which approximates the fair valueat each reporting period. When the Company no longer holds a controlling financial interest in the sponsored fund, the Company deconsolidates thesponsored fund and removes the related assets, liabilities and redeemable non-controlling interests from its balance sheet. Because consolidatedsponsored funds carry their assets and liabilities at fair value, there is no incremental gain or loss recognized upon deconsolidation.In November 2020, the sponsored fund was delisted and liquidated. Therefore it was deconsolidated in Group's consolidated financial statementsince November 2020.Use of estimatesThe preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions thataffect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Significant accounting estimatesreflected in the Group’s consolidated financial statements include allowance for doubtful accounts, the useful lives of long-lived assets, impairmentof long-lived assets and goodwill, fair value measurement of long-term equity securities without readily determinable fair value, long-termavailable-for-sale securities, purchase price allocation for business acquisition, share-based compensation, the valuation allowance for deferred taxassets and income taxes. Actual results could differ from those estimates, and such differences may be material to the consolidated financialstatements.Fair valueFair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between marketparticipants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recordedat fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that marketparticipants would use when pricing the asset or liability.Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into threebroad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that issignificant to the fair value measurement as follows:Level 1Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.Level 2Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset orliability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets withinsufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or canbe derived principally from, or corroborated by, observable market data. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 157 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-162. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)Fair value (Continued)Level 3Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurementof the fair value of the assets or liabilities.Fair value of financial instrumentsThe Group’s financial instruments consist primarily of cash and cash equivalents, cash—segregated for regulatory purpose, term deposits, financialinstruments held, at fair value, derivative assets or liabilities in relation to the Company’s derivative transactions, receivables from or payable tocustomers, receivables from or payables to brokers, dealers, clearing organizations, amounts due from related parties, long–term equity securitieswithout readily determinable fair value, and long-term available–for– sale securities. The Company carries its financial instruments held, at fairvalue, long-term available–for–sales securities at fair value. Financial instruments held, at fair value, based upon quoted market price, consist ofstock investments related to the exchange trade funds (“ETFs”), US treasuries and corporate bonds. The carrying amounts of cash and cashequivalents, cash—segregated for regulatory purpose, term deposits, receivables from or payables to customers, receivables from or payables tobrokers, dealers and clearing organizations, amounts due from related parties approximate their fair values due to the short–term maturities of theseinstruments.Derivative financial instrumentsThe Company may utilize derivative financial instruments to mitigate the risk of fair value change of its investments in certain consolidatedsponsored funds seeded for business development purposes. These derivative financial instruments are not designated as hedging instruments foraccounting purposes. The Company does not use derivative financial instruments for speculative purposes. The Company records the derivativefinancial instruments in financial instrument held, at fair value or accrued expenses and other current liabilities on its consolidated balance sheetsand measures these instruments at fair value. The Company has entered into certain stock index future contracts. As of December 31, 2019, theCompany held 34 outstanding future contracts with a notional value of US$5,951,530 and remaining contract term for 2.6 months. No outstanding future contracts held at December 31, 2020. For the years ended December 31, 2019 and 2020, the Company recognized US$1,766,679 and US$2,316,585 loss from settled future contracts.Cash and cash equivalentsCash and cash equivalents consist of cash on hand, demand deposits with financial institutions, term deposits with an original maturity ofthree months or less and highly liquid investments, which are unrestricted from withdrawal or use, or which have original maturities ofthree months or less when purchased.Cash—segregated for regulatory purposeCertain subsidiaries of the Company are obligated by rules mandated by their primary regulators to segregate or set aside amount of cash depositedby the customer and the Company. Such regulations are promulgated to protect customer assets and meet the capital adequacy and other regulatoryrequirement. A corresponding payable to customers is recorded upon receipt of the cash from the customer. Restricted cash represents cash andcash equivalents that are subject to withdrawal or usage restrictions. Cash segregated for regulatory purposes meets the definition of restricted cashand is included in "cash, cash equivalents and restricted cash" in the consolidated statements of cash flows. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 158 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-172. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)Cash—segregated for regulatory purpose (Continued)As of December 31, 2019 and 2020, Marsco, the Company’s broker-dealer subsidiary located in the USA, had a cash of US$25,167,014 andUS$29,625,645 segregated for the exclusive benefit of customers under Rule 15c3-3 of the Securities Exchange Act.Term depositsTerm deposits consist of bank deposits with an original maturity of greater than three months and less than one year.Receivables from and payable to CustomersReceivables from customers include the margin loans extended to consolidated accounts customers by the Group. Securities owned by thecustomers, which are not recorded in the consolidated balance sheets, are held as collateral for amounts due on the loan receivables. Receivablesfrom customers are recorded net of allowance for doubtful accounts. Revenues earned from the margin loan transactions are included in interestincome. The amounts receivable from customers that are determined by management to be uncollectible when the fair value of the collaterals fallunder the carrying value of the receivables are recorded as bad debt expense in the consolidated statements of comprehensive income(loss). For theyears ended December 31, 2018, 2019 and 2020, nil, nil and US$91,788 of allowance for doubtful accounts were recorded.The table below presents the movement of allowance for doubtful accounts from customers for the year ended December 31, 2020. For the year ended December 31,2020Balance at the beginning of the year —Accruals (reversals)91,788Balance at the end of the year91,788Payable to customers represent the closing cash balance to the customers, which include cash deposit and cash collateral received or advanced fromconsolidated account customers derived from security borrowing and lending activities.The Company receives or advances cash collateral, in an amount equals to or in excess of the fair value of the securities borrowed and loaned bycustomers. The Company monitors the market value of securities borrowed and loaned on a daily basis, with additional collateral obtained orrefunded as permitted contractually. Interest income and interest expense are recorded on an accrual basis.Receivables from and Payables to brokers, dealers and clearing organizationsReceivables from brokers, dealers and clearing organizations include customers’ cash deposits, the Group’s revenue receivables, cash collateralreceived for consolidated account customers’ security lending activities, and net receivables arising from unsettled trades.Payables to brokers, dealers and clearing organizations include borrowed margin and cash collaterals received from securities borrowingtransactions. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 159 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-182. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)Receivables from and Payables to brokers, dealers and clearing organizations (Continued)Securities borrowing transactions require the Company to deposit cash with the lender, and securities lending transactions result in the Companyreceiving collateral in the form of cash from the brokers, dealers and clearing organization. The cash collateral advanced to or received from thebrokers are in an amount generally equal to or in excess of the market value of the securities that borrowed or loaned by the consolidated accountcustomers. The Company monitors the market value of securities borrowed and loaned on a daily basis, with additional collateral obtained orrefunded as permitted contractually. Interest income and interest expense are recorded on an accrual basis.Property, equipment, and intangible assets, netProperty and equipment mainly consist of electronic equipment, office equipment, leasehold improvements and software. The property andequipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis over the following estimated usefullives:Electronic equipment 3 yearsOffice equipment 5 yearsSoftware5 yearsLeasehold improvement Shorter of the lease terms or the estimated useful lives of the assetsIntangible assets mainly consist of the brokerage’s license in USA, New Zealand and Australia acquired by the Company, which are recognized asintangible assets with indefinite life, and it should not be amortized until its useful life is determined to be no longer indefinite. An intangible assetthat is not subject to amortization is tested for impairment at least annually or if events or changes in circumstances indicate that the asset mightbe impaired.GoodwillGoodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. Goodwill isnot amortized but is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired.Goodwill is tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances changethat would more likely than not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include asignificant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significantportion of a reporting unit.Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities toreporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. The estimation of fair value ofeach reporting unit using a discounted cash flow methodology also requires significant judgments, including estimation of future cash flows, whichis dependent on internal forecasts, estimation of the long-term rate of growth for the Group's business, estimation of the useful life over which cashflows will occur, and determination of the Group's weighted average cost of capital. The estimates used to calculate the fair value of a reportingunit change from year to year based on operating results and market conditions. Changes in these estimates and assumptions could materially affectthe determination of fair value and goodwill impairment for the reporting unit. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 160 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-192. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)Goodwill (Continued)The Group first assesses relevant events and circumstances to determine whether it is necessary to perform the two-step goodwill impairment test.If, after assessing the totality of events or circumstances such as those described in the preceding paragraph, the Group determines that it is notmore likely than not that the fair value of a reporting unit is less than its carrying amount, then the first and second steps of the goodwillimpairment test are unnecessary. The first step of the goodwill impairment test, used to identify potential impairment, compares the fair value of areporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit is greater than zero and its fair value exceedsits carrying amount, goodwill of the reporting unit is considered not impaired and the second step of the impairment test is unnecessary. If thecarrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of the affected reporting unit’s goodwillto the carrying value of that goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a businesscombination with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The excess ofthe fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. This allocationprocess is only performed for purposes of evaluating goodwill impairment and does not result in an entry to adjust the value of any assets orliabilities. The Group concluded that the estimated fair value of the reporting unit substantially exceeded the underlying carrying value as ofDecember 31,2020. No impairment charge was recognized for the years ended December 31, 2018, 2019 and 2020.LeaseThe Group leases offices and other facilities in different cities in the PRC, New Zealand, USA and other countries. The Group determines whetheran arrangement constitutes a lease and records lease liabilities and right-of-use assets on its consolidated balance sheets at the leasecommencement. The Group measures its lease liabilities based on the present value of the total lease payments not yet paid discounted based on themore readily determinable of the rate implicit in the lease or its incremental borrowing rate, which is the estimated rate the Group would berequired to pay for a collateralized borrowing equal to the total lease payments over the term of the lease. The Group estimates its respectiveincremental borrowing rate for each jurisdiction based on their analysis of publicly traded debt securities of companies with credit and financialprofiles similar to its own. The Group measures right-of-use assets based on the corresponding lease liability adjusted for payments made to thelessor at the commencement date, and initial direct costs it incurs under the lease. The Group begins recognizing operating lease expense when thelessor makes the underlying asset available to the Group. The Group's leases have remaining lease terms of up to ten years, some of which includeoptions to extend the leases for an additional period which has to be agreed with the lessors based on mutual negotiation. After considering thefactors that create an economic incentive, the Group did not include renewal option periods in the lease term for which it is not reasonably certainto exercise.For short-term leases, the Group records operating lease expense in its consolidated statements of comprehensive income (loss) on a straight-linebasis over the lease term and record variable lease payments as incurred. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 161 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-202. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)Long-term investmentThe Group’s long-term investments consist of equity securities without readily determinable fair values, available-for-sale securities and equitymethod investment.(a)Equity securities without readily determinable fair valuesFor investments in equity securities without readily determinable fair values, the Group elects to use the measurement alternative definedas cost, less impairment, adjusted by observable price change. The Group reviews its equity securities without readily determinable fairvalues investments for impairment at each reporting period by performing a qualitative assessment considering impairment indicators. TheGroup recorded nil, US$755,524 and nil impairment loss on its equity securities without readily determinable fair values during the yearsended December 31, 2018, 2019 and 2020.(b)Available-for-sale securitiesFor investments which are determined to be debt securities, the Group accounts for them as long-term available-for-sale securities whenthey are not classified as either trading or held-to-maturity investments.Available-for-sale securities is carried at its fair value and the unrealized gains or losses from the changes in fair values are included inaccumulated other comprehensive income or loss.The Group reviews its investments for other than temporary impairment based on the specific identification method. The Group considersavailable quantitative and qualitative evidence in evaluating potential impairment of its investments. If the cost of an investment exceedsthe investment’s fair value, the Group considers, among other factors, general market conditions, government economic plans, theduration and the extent to which the fair value of the investment is less than the cost, the Group’s intent and ability to hold the investment,and the financial condition and near term prospects of the investees. The Group recorded nil, nil and US$150,978 impairment losses on itsavailable-for-sale securities during the years ended December 31, 2018, 2019 and 2020, respectively.(c)Equity method investmentIn accordance with ASC 323 Investment—Equity Method and Joint Ventures, the Group accounts for an equity method investment overwhich it has significant influence but does not own a majority of the equity interest or otherwise controls and the investments are eithercommon stock or in substance common stock using the equity method. The Group’s share of the investee’s profit and loss is recognized inthe consolidated statements comprehensive income (loss) of the period.An impairment loss on the equity method investments is recognized in the consolidated statements of comprehensive income (loss) whenthe decline in value is determined to be other-than-temporary. The Group did not record any impairment losses on its equity methodinvestment during the years ended December 31, 2018, 2019 and 2020. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 162 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-212. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)Revenue recognitionRevenue from contracts with customers is recognized when or as the Group satisfies its performance obligations by transferring the promisedservices to the customers. A service is transferred to a customer when or as the customer obtains control of that service. A performance obligationmay be satisfied at a point in time or over time. Revenue from a performance obligation satisfied at a point in time is recognized at the point in timethat the Group determines the customer obtains control over the promised service. Revenue from a performance obligation satisfied over time isrecognized by measuring the Group’s progress in satisfying the performance obligation in a manner that depicts the transfer of the services to thecustomer. The amount of revenue recognized reflects the consideration the Group expects to receive in exchange for those promised services (i.e.,the “transaction price”).The Group’s revenues from contracts with customers are recognized when the performance obligations are satisfied at an amount that reflects theconsideration expected to be received in exchange for such services. The majority of the Group’s performance obligations are satisfied at a point intime upon the successful execution and clearing of the customer’s trade order. Revenue is collected from the Group’s clearing partners in thebrokerage business or from the customers directly by debiting their brokerage account with the Group.Nature of ServicesThe Group’s services under contracts with customers are mainly related to its commission earned from its online brokerage business under theconsolidated accounts (which customer information are not disclosed to the broker) and the fully disclosed accounts. The Group’s main sources ofrevenue from contracts with customers are as follows:i)Commissions earned for the Group’s online brokerage business in customers’ fully disclosed accounts and consolidated accounts arecharged for each customer trade order executed and cleared by broker on a trade date basis and are reported as commissions in theconsolidated statements of comprehensive income (loss).According to the attributes of transactions under consolidated accounts, the Group provides brokerage service for its customers.Commission fees are deducted from the customer's account at the time of trade order initiation and a pre-determined portion is directed tothe broker. The Group recognizes revenue at the time of execution of the order (i.e., trade date) on a gross basis as the Group is determinedto be the primary obligor in fulfilling the trade order initiated by the customer.According to the attributes of transactions under fully disclosed accounts, the Group provides the agreed services to its customers infacilitating the trades. Every time the broker executes and clears a trade, the broker collects the commissions, deducts its pre-determinedportion and returns the rest of the commission fees to the Group. Accordingly, the commission fee is recorded on a net basis.ii)Finance servicing fees are related to margin loans and securities borrowing and lending activities provided by the brokers under the fullydisclosed accounts. Revenue is recognized over the period that the margin loans and securities borrowing and lending activities areoutstanding.iii)Interest income is generated from margin loans and securities borrowing and lending activities provided to consolidated accountcustomers and interest income from bank deposits. Interest income is recognized on an accrual basis. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 163 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-222. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)Revenue recognition (Continued)iv)Other revenues consist of the revenue arising from initial public offering (“IPO”) distribution service and others. Revenue from the IPOdistribution service is derived from IPO underwriting and new share subscription services in relation to IPOs in the USA and Hong Kongcapital market. IPO distribution revenue are generally recognized when the services are completed. The related revenue from IPOdistribution services amounted at US$ 475,055, US$ 3,142,763 and US$ 13,760,209 for the years ended December 31, 2018, 2019 and2020. The Group also provides promotional and advertisement service and financial advisory service under the contracts with customers,which are recorded over the period of service provided.Contract liabilities arise when customers remit contractual cash payments in advance of the Company satisfying its performance obligations underthe contract and are derecognized when the revenue associated with the contract is recognized either when a milestone is met triggering thecontractual right to bill the customer or when the performance obligation is satisfied. Contract liabilities are reported in deferred income andaccrued expenses and other current liabilities-advanced from customers in the consolidated balance sheets.Research and development expensesResearch and development expenses primarily consist of salaries and employee benefits, rental, and depreciation expenses related to thedevelopment of the Group’s proprietary trading platform, back-end technology and customer relationship management system. For the years endedDecember 31, 2018, 2019 and 2020, US$11,282,241 and US$18,033,074 and US$ 22,507,376 of research and development costs have beenexpensed as incurred as the costs qualifying for capitalization have been insignificant.Occupancy, Depreciation and AmortizationOccupancy expenses consist primarily of lease payments on office and data center leases and related occupancy costs, such as utilities.Depreciation and amortization expenses result from the depreciation of fixed assets, such as electronic equipment, office equipment as well asleasehold improvements and the amortization of intangible assets.Share-based compensationShare-based payment transactions with employees and managements, such as share options are measured based on the grant date fair value of theequity instrument. The Group has elected to recognize compensation expenses using the straight-line method for all employee equity awardsgranted with graded vesting provided that the cumulative amount of compensation cost recognized at any date is at least equal to the portion of thegrant-date value of the options that are vested at that date, over the requisite service period of the award, which is generally the vesting period ofthe award. Compensation expenses for awards with performance conditions is recognized when it is probable that the performance condition willbe achieved. The Group elects to recognize forfeitures when they occur. Compensation expenses for awards with service conditions is recognizedon a straight-line method over the requisite service period.The cancellation of an award accompanied by the concurrent grant of a replacement award is accounted for as a modification of the terms of theawards. The incremental compensation cost is measured as the excess of the fair value of the modified award over the fair value of the modifiedaward at the modification date. The incremental portion of share-based compensation for the vested portion is recognized immediately and theincremental portion of share-based compensation for the unvested portion is recognized over the remaining vesting period of the award. If an awardis canceled without the concurrent grant of a replacement award or any other consideration, unrecognized compensation cost related to the canceledaward is recognized immediately upon cancelation. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 164 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-232. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)Share-based compensation (Continued)For awards granted with a performance condition that affects vesting, the performance condition is not considered in determining the award's grant-date fair value; however, the performance condition is considered when estimating the quantity of awards that are expected to vest. Nocompensation expense is recorded for awards with a performance condition unless and until the performance condition is determined to beprobable of achievement.Income taxesCurrent taxes are provided for in accordance with the laws of the relevant tax authorities. Deferred taxes are recognized when temporarydifferences exist between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements. Deferred taxassets and liabilities, including those for net operating loss carryforwards are measured using enacted statutory tax rates applicable to future years.Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that a portion of or all ofthe deferred tax assets will not be realized.The Group accounts for uncertainty in income taxes by recording an unrecognized tax benefit resulting from tax positions taken or expected to betaken in a tax return. Tax benefits are recognized when the Group believes that it is more likely than not that the tax position will be sustained onexamination by the taxing authorities based on the technical merits of the position. A tax position that meets the more likely than not recognitionthreshold is measured as the largest amount of tax benefit that is greater than 50 percent likely of being realized upon settlement. The Grouppresents interest and penalties, if any, related to an underpayment of income taxes in income tax expense.The Group accounts for residual income tax effects in accumulated other comprehensive income due to a change in tax law or a change injudgment about realization of a valuation allowance using the portfolio method and only releases residual amounts when the entire portfolio isliquidated.Comprehensive income or lossComprehensive income or loss consists of two components, net income or loss and other comprehensive income or loss, net of tax. Othercomprehensive income or loss refers to revenue, expenses, and gains and losses that are recorded as an element of shareholders’ equity but areexcluded from net income or loss. The Group’s other comprehensive income or loss consists of foreign currency translation adjustments from itssubsidiaries not using the US$ as their functional currency and the fair value change of long-term available-for-sale securities of the Group, if any.Comprehensive income or loss is reported in the consolidated statements of comprehensive income (loss).Treasury stockThe Group accounted for those shares repurchased as treasury stock at cost, Treasury stock, and is shown separately in the shareholders' equity asthe Company has not yet decided on the ultimate disposition of those shares acquired. When the Company decides to cancel the treasury stock, thedifference between the original issuance price and the repurchase price is debited into additional paid-in capital. Refer to Note 13 for details. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 165 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-242. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)Non-controlling interestsFor the Company’s consolidated subsidiaries, non-controlling interests are recognized to reflect the portion of their equity that is not attributable,directly or indirectly, to the Company as the controlling shareholder. Non-controlling interests are classified as a separate line item in the equitysection of the Group’s consolidated balance sheets and have been separately disclosed in the Group’s consolidated statements of comprehensiveincome (loss) to distinguish the interests from that of the Company.Foreign currenciesThe reporting currency of the Company is the US$. The Company and the Company’s subsidiaries with operations in the PRC, Hong Kong,New Zealand, Singapore, Australia, the United States and other jurisdictions use their respective local currencies as their functional currenciesexcept for TBNZ which changed the functional currency from local currency to US$. The financial statements of the Company’s subsidiaries, otherthan the subsidiaries with functional currency in US$, are translated into US$ using the exchange rate as of the balance sheet date for assets andliabilities and the average daily exchange rate for each month for income and expense items. Translation gains and losses are recorded as a separatecomponent of other comprehensive income or loss in the consolidated statements of change in equity (deficit ) and consolidated statements ofcomprehensive income (loss).In the financial statements of the Company’s subsidiaries, transactions in currencies other than the functional currency are measured and recordedin the functional currency using the exchange rate in effect at the date of the transaction. At the balance sheet date, monetary assets and liabilitiesthat are denominated in currencies other than the functional currency are translated into the functional currency using the exchange rate at thebalance sheet date. All gains and losses arising from foreign currency transactions are recorded in other income in the consolidated statements ofcomprehensive income (loss) during the year in which they occur.RMB is not a freely convertible currency. The State Administration for Foreign Exchange, under the authority of the People’s Bank of China,controls the conversion of RMB into other currencies. The value of the RMB is subject to changes in central government policies and tointernational economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. TheGroup’s cash and cash equivalents denominated in RMB amounted to US$3,696,283, US$9,473,171 and US$5,972,337 as of December 31, 2018,2019 and 2020, respectively. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 166 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-252. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)Net income (loss) per shareBasic income (loss) per ordinary share is computed by dividing net income (loss) attributable to ordinary shareholders by the weighted averagenumber of ordinary shares outstanding during the period. The Group’s preferred shares are participating securities as they participate inundistributed earnings on an as-if-converted basis. Accordingly, the Group uses the two-class method whereby undistributed net income isallocated on a pro rata basis to the ordinary shares and preferred shares to the extent that each class may share in income for the period; whereas theundistributed net loss for the period is allocated to ordinary shares only because the redeemable and non-redeemable preferred shares are notcontractually obligated to share the loss.Diluted income (loss) per ordinary share reflects the potential dilution that could occur if securities were exercised or converted into ordinaryshares. The Group had redeemable and non-redeemable preferred shares granted prior to the initial public offering, share options and restrictedshare units, which could potentially dilute basic income (loss) per share. To calculate the number of shares for diluted income (loss) per ordinaryshare, the effect of the preferred shares is computed using the as-if-converted method; the effect of the share options and restricted share units iscomputed using the treasury stock method.Concentration of credit riskThe Group's exposure to credit risk associated with its trading and other activities is measured on an individual counterparty basis, as well as bygroups of counterparties that share similar attributes. Concentrations of credit risk can be affected by changes in political, industry, or economicfactors. To reduce the potential for risk concentration, credit limits are established and exposure is monitored in light of changing counterparty andmarket conditions. As of December 31, 2019 and 2020, the Group did not have any material concentrations of credit risk outside the ordinarycourse of business.Concentration of revenueThere is no customer accounting for 10% or more of total revenues for the years ended December 31, 2018, 2019 and 2020, respectively.Concentration of supplierThe Group relies on third parties for the execution and clearing of trade requests made by customers. In instances where these parties fail toperform their obligations, the Group may be temporarily unable to find alternative suppliers to satisfactorily deliver services to its customers in atimely manner, if at all.For the years ended December 31, 2018, 2019 and 2020, 96.8%, 78.4% and 74.8% of its total net revenues were executed and cleared byone supplier. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 167 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-262. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)Current Expected Credit LossesOn January 1, 2020, the Group adopted FASB ASC Topic 326 – “Financial Instruments – Credit Losses” (“ASC Topic 326”) which replaces theincurred loss methodology with the current expected credit loss (“CECL”) methodology. The new guidance applies to financial assets measured atamortized cost, held-to-maturity debt securities and off-balance sheet credit exposures. For on-balance sheet assets, an allowance must berecognized at the origination or purchase of in-scope assets and represents the expected credit losses over the contractual life of those assets.Expected credit losses on off-balance sheet credit exposures must be estimated over the contractual period the Group is exposed to credit risk as aresult of a present obligation to extend credit.The Group adopted ASC Topic 326 using the modified retrospective approach for all in-scope assets, which did not result in an adjustment to theopening balance in retained earnings. Results for reporting periods beginning after January 1, 2020 are presented under ASC Topic 326 while priorperiods continue to be reported in accordance with previously applicable U.S. GAAP. The impact to the current period is not material since theGroup’s in-scope assets are primarily subject to collateral maintenance provisions for which the Company elected to apply the practical expedientof reporting the difference between the fair value of collateral and the amortized cost for the in-scope assets as the allowance for current expectedcredit losses.AcquisitionIn July 2019, the Group acquired 100% equity interests in Marsco for a total consideration of US$9,348,290 in a combination of US$6,348,290 ofcash and US$3,000,000 of Class A ordinary shares of the Company. Marsco is a licensed U.S self-clearing broker-dealer that focuses onempowering self-directed investors with the necessary tools to manage their portfolios. Marsco brings in rich broker dealer experience in executionand clearing.The acquisition was recorded using the acquisition method of accounting. Accordingly, the acquired assets and liabilities were recorded at their fairvalue at the date of acquisition. The tangible and intangible assets valuation disclosed below was based on a valuation analysis prepared by themanagement with the assistance from an independent third-party appraiser. In order to value the intangible asset, a multi period excess earningsmethod (“MPEEM”), a method of discount cash flow, was used. The MPEEM requires significant judgment and estimates by the management onfuture earnings as well as the economic useful life, taking into account certain factors including the appropriate discount rate. Marsco’s financialstatements constituted less than 1% of revenue and 4.1% of total assets of the Company's consolidated financial statement for and as of the yearended December 31, 2019.The purchase price was allocated at the date of acquisition as follows: US$ Amortization periodCash and cash equivalents 339,611 Cash-segregated for regulatory purpose 22,094,198 Other current assets 5,098,900 Property, plant and equipment 5,581 3-5 yearsIntangible assets Operating License 6,900,000 Indefinite lifeGoodwill 2,421,403 Other current liabilities (26,062,403) Deferred tax liabilities (1,449,000) 9,348,290 Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 168 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-272. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)Acquisition (Continued)The goodwill is mainly attributable to intangible assets that cannot be recognized separately as identifiable assets under U.S.GAAP, and compriseof (a) the assembled work force and (b) the expected but unidentifiable business growth as a result of synergy effect from the acquisition. Theacquired goodwill is not deductible for tax purposes.The Group incurred total acquisition costs of US$377,239. The acquisition costs were primarily related to legal, accounting and advisory servicesand were expensed as incurred for the year ended December 31, 2019 and are included in general and administrative expenses in the consolidatedstatements of comprehensive income (loss).Pro forma information of acquisitionsThe following unaudited pro forma information summarizes the results of operations of the Group for the years ended December 31, 2018 and2019 assuming that the acquisition of Marsco occurred as of January 1, 2018. The following pro forma financial information is not necessarilyindicative of the results that would have occurred had the acquisitions been completed at the beginning of the periods as indicated, nor is itindicative of future operating results: For the years ended December 31,20182019US$US$UnauditedUnauditedPro forma net revenue 34,652,211 55,150,145Pro forma net loss (44,107,663) (5,799,848)Recent Accounting PronouncementsIn June 2016, the FASB amended guidance related to impairment of financial instruments as part of ASU 2016-13 Financial Instruments—CreditLosses (Topic 326): Measurement of Credit Losses on Financial Instruments, which is effective on January 1, 2020. The guidance replaces theincurred loss impairment methodology with an expected credit loss model for which the group is required to recognize an allowance based on itsestimate of expected credit loss. In November 2018, FASB issued ASU No, 2018-19, Codification Improvements to Topic 326, further clarified thescope of the guidance in the amendments in ASU 2016-13. In May 2019, FASB issued ASU No.2019-05, Financial instrument—Credit Losses(Topic 326), Targeted Transition Relief, which provides an irrevocably fair value option to elect for eligible instruments. In November 2019, FASBissued ASU 2019-11 Codification Improvements to Topic 326, Financial Instruments-Credit Losses, which clarified and improved various aspectsof ASU 2016-13. In March 2020, FASB issued ASU 2020-03, Codification Improvements to Financial Instruments, which improves and clarifiesvarious financial instruments topics, including the current expected credit losses standard. As of January 1, 2020, the Group adopted ASC Topic326 using the modified retrospective approach for all in-scope assets. The adoption of ASC Topic 326 has no impact on the Group's retainedearnings as of January 1, 2020. Results for reporting periods beginning after January 1, 2020 are presented under ASC Topic 326 while priorperiods continue to be reported in accordance with previously applicable U.S. GAAP.In August 2018, the FASB issued ASU 2018-13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement.The amendments in this standard will remove, modify and add certain disclosures under ASC Topic 820, Fair Value Measurement, with theobjective of improving disclosure effectiveness. ASU 2018-13 is effective for the Group’s fiscal year beginning January 1, 2020, with earlyadoption permitted. The update eliminates the requirement to disclose: (a) the amount and reasons for transfers between Level 1 and Level 2 of thefair value hierarchy; (b) an entity's policy for timing of transfers between levels; (c) and an entity's valuation processes for Level 3 fair valuemeasurements. The Group adopted ASU 2018-13 on January 1, 2020, and the adoption had no material impact on the Group’s consolidatedfinancial statements. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 169 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-282. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)Recent Accounting Pronouncements (Continued)In December 2019, the FASB issued ASU 2019-12, Income taxes (Topic 740)-Simplifying the accounting for income taxes, which simplifies theaccounting for income taxes by removing certain exceptions to the general principles in Topic 740, Income Taxes. For public business entities, theASU will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. For all other entities, theamendments are effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15,2022. The Group will apply this ASU for the fiscal year beginning January 1, 2021, and interim period within fiscal year beginning at January 1,2021. The Group is currently evaluating the impact of this new guidance on the consolidated financial statements but does not expect this guidancewill have a material impact on its consolidated financial statements.In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which providesoptional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform onfinancial reporting if certain criteria are met. The amendments in ASU 2020-04 provide optional expedients and exceptions for applying GAAP tocontracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because ofreference rate reform. This guidance is effective immediately and the amendments may be applied prospectively through December 31, 2022. Theadoption did not have a material accounting impact on the Group's consolidated financial position or results of operations.3. PREPAID EXPENSES AND OTHER CURRENT ASSETSPrepaid expenses and other currents assets consisted of the following:As of December 31,20192020 US$ US$IPO distribution service and promotional and advertisement service receivables2,080,4115,360,831Input VAT receivables1,626,2131,174,934Interest receivables from term deposits1,526,625429,454Prepayment for long-term investment854,891—Prepaid professional service fees 405,094 998,235Prepaid data and IT service expenses391,2141,315,469Advances to employees286,900825,682Prepaid marketing expenses 222,167 402,724Rental and other deposits 215,182 391,625Others 411,495 315,476 8,020,192 11,214,430 Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 170 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-294. PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS, NETProperty, equipment and intangible assets, net, consisted of the following:As of December 31,20192020 US$ US$Electronic Equipment 1,530,269 2,385,263Office Equipment 219,418 235,894Leasehold improvement 543,262 100,417Software197,564159,939Less: accumulated depreciation (1,028,796) (1,252,714)Property and equipment, net 1,461,717 1,628,799Licenses 7,967,036 7,967,036Trademark117,424125,285Less: accumulated amortization(10,636)(28,086)Intangible assets, net8,073,8248,064,235Total 9,535,541 9,693,034Depreciation and amortization expenses for the years ended December 31, 2018, 2019 and 2020 were US$473,730, US$752,167 and US$928,414,respectively.5. LONG-TERM INVESTMENTSEquity securities without readily determinable fair valueThe Group had the following equity securities without readily determinable fair value:As of December 31, 2019 2020US$US$Tibet Gelonghui Information Technology Co., LTD (“Gelonghui”)(a) 1,436,413 1,532,567UNext Group Limited ("UNext")(b)600,000600,000Total 2,036,413 2,132,567(a)In October 2017, the Group acquired 1.0% equity interests of Gelonghui for a purchase consideration of US$1,536,972 (RMB10,000,000).Gelonghui is principally engaged in information technology development, technical consultation and technical services. On January 1, 2018,the Group adopted ASU 2016-01 and ASU 2018-03 with no significant impacts noted. No fair value change was recorded for the years endedDecember 31, 2019 and 2020. The change of balance was foreign exchange difference.(b)In December 2019, the Group acquired 0.6% equity interests of UNext for a purchase consideration of US$600,000. UNext is principallyengaged in financing service. No fair value change was recorded for the years ended December 31, 2019 and 2020. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 171 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-305. LONG-TERM INVESTMENTS (Continued)Available-for-sale securitiesThe Group had the following available-for-sale securities:As of December 31,20192020 US$ US$Beijing Yingxin Network Technology Co., LTD (“Yingxin”)(c) 753,496 803,938Beijing Smart Zhenzhi Technology Co., LTD (“Zhenzhi”)(d) 167,197 —Alphalion Technology Holding Limited (“Alphalion”)(e)3,060,1133,120,113Total 3,980,806 3,924,051(c)In September 2017, the Group acquired 2.91% equity interests of Yingxin for a purchase consideration of US$461,092 (RMB3,000,000).Yingxin is principally engaged in IT services, including systems, data or maintenance. The investment was classified as available-for-salesecurities as the Group determined that the preferred shares were debt securities due to the redemption option available to the investor andmeasured the investment subsequently at fair value. The unrealized holding gains of US$326,623, nil and nil were reported in othercomprehensive income or loss for the years ended December 31, 2018, 2019 and 2020. The change of balance in 2020 was foreign exchangedifference.(d)In July 2017, the Group acquired 3.33% equity interest of Zhenzhi for a purchase consideration of US$153,697 (RMB1,000,000). Zhenzhi isprincipally engaged in IT services, including software maintenance, application service and data processing. The investment was classified asavailable-for-sale securities as the Group determined that the preferred shares were debt securities due to the redemption option available tothe investors and measured the investment subsequently at fair value. The unrealized holding gain of US$23,853 and nil for the years endedDecember 31, 2018 and 2019 were reported in other comprehensive income or loss. For the year ended December 31, 2020 , due to thedeterioration of the operating conditions of Zhenzhi, the Group had made full provision of US$150,978 for the impairment of this investment.(e)In February 2019, the Group entered into a series of agreements to covert its short-term interest-free loans to Alphalion Technology HoldingLimited and its affiliates amounted at US$3,060,113 into 25% equity interest of Alphalion (Note 14). Alphalion is principally engaged in ITservices, including software maintenance, application service and data processing. The investment was classified as available-for-salesecurities as the Group determined that the preferred shares were debt securities due to the redemption option available to investors andmeasured the investment subsequently at fair value. US$60,000 fair value change was recorded for the year ended December 31,2020. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 172 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-315. LONG-TERM INVESTMENTS (Continued)Equity method investments:The Group had the following Equity method investments:As of December 31,20192020 US$ US$Ocean Joy Holdings Limited (“Ocean Joy”) (f)—424,333Total — 424,333(f)The Group prepaid US$462,276 (HKD3,600,000) in 2019 for the investment of 30% equity interests in Ocean Joy (including its solesubsidiary Ocean Joy Securities Limited) which has a license approved by SFC in Hong Kong to provide securities and futures services. Theinvestment was completed in May 2020. The Group accounted for the investment under the equity method because the investments are ofcommon stock and the Group has significant influence but does not control Ocean Joy. For the year ended December 31, 2020, the Group hadrecorded an investment loss of US$40,625.6. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIESAccrued expenses and other current liabilities consisted of the following:As of December 31, 2019 2020 US$ US$Accrued payroll and welfare 9,444,626 12,099,447Income and non-income based tax payables 2,677,610 4,936,372Accrued marketing expenses 2,416,759 6,251,009Accrued professional expenses 1,185,326 2,471,569Accrued data and IT service expenses552,814622,641Advanced from customers 294,881 429,531Others 309,941 327,632 16,881,957 27,138,201 Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 173 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-327. INCOME TAXESPRCUnder the PRC Enterprise Income Tax Law (the “EIT Law”), the standard enterprise income tax rate for domestic enterprises and foreign investedenterprises is 25%. In addition, the EIT Law and its implementing rules permit qualified “High and New Technologies Enterprise” (the “HNTE”) toenjoy a reduced 15% EIT rate. Beijing U-Tiger Business began to qualify as an HNTE under the EIT Law in 2017, subject to the tax rate of 15%with a valid period of three years starting from December 2017 and obtained new certificate on December 2, 2020, subject to the tax rate of 15%with a valid period of three years. The Group’s other subsidiaries are subject to income tax rate of 25%, according to EIT Law.Cayman IslandsUnder the current laws of the Cayman Islands, the Group is not subject to tax on its income or capital gains.New ZealandThe Group’s subsidiary, TBNZ is located in New Zealand and is subject to an income tax rate of 28% for taxable income earned in New Zealand.Hong KongThe Group’s subsidiaries, Up International, Tiger Technology, Kastle limited, Tiger Securities, Tung Chi and Tiger Assets, are located in HongKong and are subject to a profits tax rate of 8.25% on assessable profits up to HK$2,000,000 and 16.5% on any part of assessable profits overHK$2,000,000.USAThe Group’s subsidiaries, Marsco, Tiger Holding LLC, US Tiger Securities, Tiger Fintech Holdings, Trading Front, Tradeup and Wealthn LLC, arelocated in the USA and are subject to a federal income tax rate of 21% for taxable income earned in the USA.SingaporeThe Group’s subsidiaries, Tiger SG and Tiger Brokers SG, are located in Singapore and are subject to an income tax rate of 17% for taxable incomeearned in Singapore.AustraliaThe Group’s subsidiaries, TBAU, Fleming and Tiger investor, are located in Australia and are subject to an income tax rate of 27.5% for taxableincome earned in Australia.IndiaThe Group's subsidiary, Amtiger is located in India and is subject to an income tax rate of 25% for taxable income earned in India. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 174 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-337. INCOME TAXES (Continued)The components of income (loss) before income taxes are as follows, of which the amount of pre-tax loss in Cayman is immaterial and included inInternational: For the years ended December 31,2018 2019 2020US$US$US$PRC (4,014,177) 6,117,021 20,551,832International (42,152,491) (15,422,245) 1,477,960Total income (loss) before income taxes (46,166,668) (9,305,224) 22,029,792The current and deferred portions of income tax expense (benefit), all of which was incurred outside the Cayman Islands, included in theconsolidated statements of comprehensive income (loss) were as follows:For the years ended December 31, 2018 2019 2020 US$ US$ US$Current tax expense 1,706 2,859,774 1,077,877Deferred tax expense (benefit) (1,874,819) (6,215,140) 1,772,670Income tax expense (benefit) (1,873,113) (3,355,366) 2,850,547The related enterprise income tax law also imposes a withholding income tax of 10% on dividends distributed by a foreign investment enterprise("FIE") to its immediate holding company outside of the PRC, if such immediate holding company is considered as a non-resident enterprisewithout any establishment or place within the PRC or if the received dividends have no connection with the establishment or place of suchimmediate holding company within the PRC, unless such immediate holding company's jurisdiction of incorporation has a tax treaty with the PRCthat provides for a different withholding arrangement. The Cayman Islands, where the Company is incorporated, does not have such tax treaty withthe PRC. According to the arrangement between Mainland China and HKSAR on the Avoidance of Double Taxation and Prevention of FiscalEvasion in August 2006, dividends paid by an FIE in Mainland China to its immediate holding company in HKSAR will be subject to withholdingtax at a rate of no more than 5% (if the foreign investor owns directly at least 25% of the shares of the FIE). Cash dividends paid by a New Zealandincorporated company to a non-New Zealand tax resident shareholder that holds all of the shares in the New Zealand company are subject to NewZealand withholding tax at the rate of 0% if those dividends are fully imputed. If any part of a cash dividend paid to such a shareholder is not fullyimputed then New Zealand withholding tax is imposed at the rate of 15% on that part of the dividend, although that rate is reduced to 5% if theshareholder is able to take the benefit of Article 10 of the New Zealand-Singapore Double Tax Agreement. The Company does not intend to haveany of its subsidiaries located in the PRC and New Zealand distribute any undistributed profits of such subsidiaries in the foreseeable future, butrather expects that such profits will be indefinitely reinvested by such subsidiaries for their respective local operations. Accordingly, nowithholding tax was recorded as of December 31, 2019 and 2020. Undistributed earnings of such subsidiaries that are not distributed amounted toUS$19.9 million and US$33.1 million and unrecognized deferred tax liability related to such earning amounted to US$1.0 million and US$1.7million as of December 31, 2019 and December 31, 2020, respectively.The Group's subsidiaries and consolidated VIE located in the PRC, HKSAR, New Zealand, the USA, Singapore and other jurisdictions are open totax examination for the period from its inception until the years ended December 31, 2020. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 175 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-347. INCOME TAXES (Continued)The significant components of the Group’s deferred tax assets and liabilities were as follows:As of December 31, 2019 2020 US$ US$Deferred tax assets Accrued expenses 46,004 —Provision of allowance for doubtful accounts—25,704Long-term investments134,30438,314Advertising expense carryforwards 429,228 877,424Net operating loss carryforwards 16,926,698 13,407,157Withholding tax credit carryforwards — 1,106,569Lease liabilities1,583,4631,799,483Total deferred tax assets19,119,69717,254,651Less: valuation allowance (4,888,240) (4,000,159)Deferred tax assets, net of valuation allowance 14,231,457 13,254,492Deferred tax liabilities Right-of-use assets1,583,4631,799,483Long term investments86,53386,042Intangible assets1,449,0001,449,000Total deferred tax liabilities3,118,9963,334,525Deferred tax assets, net12,561,4619,919,967Deferred tax liabilities, net1,449,000—The movement of the valuation allowance is as follows:For the years ended December 31,201820192020US$US$US$Balance at the beginning of the year 1,224,057 2,931,196 4,888,240Additions of valuation allowance 1,854,637 2,573,942 1,775,887Reversals of valuation allowance——(2,802,174)Foreign currency translation (147,498) (616,898) 138,206Balance at the end of the year 2,931,196 4,888,240 4,000,159A valuation allowance is provided against deferred tax assets when the Group determines that it is more-likely-than-not that the deferred tax assetswill not be utilized in the future. The Group considers positive and negative evidence on each individual subsidiary basis to determine whethersome portion or all of the deferred tax assets will be more-likely-than-not realized.As of December 31, 2019 and 2020, the Group had net operating loss carryforwards of US$70,615,285 and US$64,430,676, respectively. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 176 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-357. INCOME TAXES (Continued)Management assessed the positive and negative evidence in certain entities in the PRC, United States, New Zealand and Singapore, and estimatedthey will have sufficient future taxable income to utilize the existing deferred tax assets. Significant objective positive evidence included thesignificant growth in customer trading activities in the New Zealand entities where tax loss could be carried forward until the loss is fully used, netoperating loss in the United States can be carried forward indefinitely generated starting in 2018, and the net operating loss can be carried forwardwith no time limit in Singapore per the local tax laws. Net operating loss can be carried forward 5 years in PRC except for a PRC entity qualified as“HNTE” which provides tax loss carryforward of 10 years. On the basis of this evaluation, the Group have concluded that deferred tax assetrecognized for certain entities in the PRC, United States, New Zealand and Singapore is more likely than not to be realized. The expiration status ofnet operating loss carryforwards as at December 31, 2020 is listed below.Expiration year US$2021 272,7162022 1,509,5862023 2,680,2502024 8,941,3752025 through 2030 29,630,906No expiration date 21,395,843As of December 31, 2019 and 2020, the Group had advertising expenses carryforwards of US$1,716,908 and US$4,712,189, respectively, whichcan be carried forward indefinitely.As of December 31, 2019 and 2020, the Group had withholding tax credit carryforwards of nil and US$1,106,569, respectively, which will expire,if unused, by 2025.The recording and ultimate reversal of valuation allowances for the deferred tax asset requires significant judgment associated with past andprojected performance. In assessing the realizability of deferred tax assets, management considered the taxable future earnings and the expectedtiming of the reversal of temporary differences. As of December 31, 2019 and 2020 valuation allowances of US$4,828,340 and US$3,867,639respectively, were provided for net operating loss carryforwards totaled US$23,654,338 and US$20,695,157 , while the remaining net operatingloss carryforwards of US$46,960,947 and US$43,735,519 is expected to be utilized prior to expiration considering future taxable income forrespective entities. Deferred tax assets related to net operating loss carryforwards of US$5,417,059 without a valuation allowance is generated in2020. Due to changes in judgment in the realizability of deferred tax assets in 2020, the valuation allowances of US$1,877,166 in 2019 werereversed in 2020. The amount of benefit of utilizing DTAs of US$909,347 in 2020 that were offset with a valuation allowance in 2019. To theextent that actual experience deviates from the assumptions, the projections would be affected and hence management’s assessment of realizabilityof deferred tax assets may change. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 177 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-367. INCOME TAXES (Continued)Reconciliation between the income tax benefit computed by applying the PRC tax rate to income (loss) before income taxes and the actual incometax expense (benefit) were as follows:For the years ended December 31, 2018 2019 2020 US$ US$ US$ Income (loss) before income taxes (46,166,668) (9,305,224) 22,029,792PRC statutory tax rate 25% 25% 25%Income tax at statutory tax rate (11,541,667) (2,326,306) 5,507,448Effect of income tax rate difference in other jurisdictions 439,213 124,406 (773,402)Super deduction of research and development expense(1,441,536)(2,479,428)(3,607,755)Effect of preferential tax rates (237,495) (2,673,841) 1,837,667Effect of expenses not deductible for tax purposes 9,053,735 1,425,861 912,876Changes in valuation allowance 1,854,637 2,573,942 (1,026,287)Income tax expense (benefit) (1,873,113) (3,355,366) 2,850,5478. ORDINARY SHARESThe Company’s Amended and Restated Memorandum of Association authorizes the Company to issue 4,662,388,278 Class A ordinary shares and337,611,722 Class B ordinary shares with a par value of US$0.00001 per share. The shareholders of Class A ordinary shares and Class B ordinary shares have the same rights except for the voting and conversion rights. Each Class A ordinary share is entitled to one vote, and is not convertible into Class B ordinary share under any circumstance; and each Class B ordinary share is entitled to twenty votes, and will be automatically converted into one Class A ordinary share under certain circumstances.As of June 7, 2018, upon the Re-domiciliation described in Note 1, the Company had 33,170,968 Class A ordinary shares and 410,643,948 Class Bordinary shares issued and outstanding, respectively. In June 2018, the Company further issued 2,480,000 Class A ordinary shares and 107,863,347 Class B ordinary shares. In November 2018, 180,895,573 Class B ordinary shares were redesignated into Class A ordinary shares. As of December 31, 2018, the Company had 216,546,541 Class A ordinary shares and 337,611,722 Class B ordinary shares issued and outstanding, respectively.In March 2019, the Group completed its initial public offering and received net proceeds of US$114,765,901, the Company newly issued237,375,000 Class A ordinary shares (representing 15,825,000 ADSs), including 13,125,000 Class A ordinary shares issued through a privateplacement from an existing shareholder, IB Global Investment LLC, an affiliate of Interactive Brokers, and 29,250,000 Class A ordinary sharesissued from exercising the over-allotment option by the underwriters.Upon the completion of the initial public offering, 1,210,906,902 outstanding Series Angel, A, B-1, B-2, B-3 and C preferred shares wereconverted into 1,210,906,902 Class A ordinary shares on a one-for-one basis, and 18,597,738 outstanding Series C-1 preferred shares wereconverted into 18,612,084 Class A ordinary shares, reflecting the anti-dilution adjustments to the conversion rate based on the initial publicoffering price of US$8.00 per ADS. As of December 31, 2019, the Company had 1,777,218,449 Class A ordinary shares and 337,611,722 Class B ordinary shares issued and outstanding, respectively.As of December 31, 2020, the Company had 1,794,357,434 Class A ordinary shares and 337,611,722 Class B ordinary shares issued and outstanding, respectively. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 178 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-379. PREFERRED SHARESAs of December 31, 2019 and 2020, the Company had no outstanding convertible preferred shares and convertible redeemable preferred shareswhich were converted to Class A ordinary shares of the Company upon its completion of the initial public offering in March 2019, and nomezzanine equity was recorded in the consolidated balance sheets. As of December 31, 2018, the Company had outstanding convertible preferredshares and convertible redeemable preferred shares which is listed below.The Series Angel preferred shares were recorded as permanent equity in the consolidated balance sheet as such preferred shares do not haveredemption right.The Series A, B-1, B-2, B-3, C and C-1 preferred shares, which were redeemable by the Company upon occurrence of certain events, wererecorded as mezzanine equity in the consolidated balance sheets.The significant terms of the preferred shares issued by the Company are as follows:Voting rightsThe holders of preferred shares and ordinary shares shall vote together based on their shareholding ratio.DividendsNo dividend, whether in cash, in property or in shares of the Company, shall be paid on any other shares, unless and until a preferential dividend incash and/or share is, in advance, paid in full on each preferred share.If the Board of Directors decides to pay dividends, the holders of Series A, B-1, B-2, B-3, C and C-1 preferred shares shall be entitled to receive, ona pro rata basis, out of any funds legally available therefor, non-cumulative dividends of 8% of the consideration that they paid for the equityinterests.Liquidation preferenceIn the event of liquidation, each holder of preferred shares, shall be entitled to receive, prior to the holders of ordinary shares, the relevant amountequal to 120% of issued price, plus all declared but unpaid dividends (“preference amount”) on each such preferred shares.In the event of insufficient funds available to pay in full the preference amount in respect of each preferred shares, the entire assets and funds of theCompany legally available for distribution to the holders of the preferred shares shall be distributed on a pro rata basis among the holders inproportion to issued price. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 179 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-389. PREFERRED SHARES (Continued)RedemptionFor Series A, B-1, B-2, B-3, C and C-1 preferred shares, upon the occurrence of any of the following events (the “Redemption Events”),(i)The Company fails to complete a Qualified IPO within sixty (60) months from February 21, 2017; (which under the formeragreement, it was from the issuance date);(ii)Certain shareholders or the Company committed significant breach of its obligations, and no corrections were made within thirty(30) days after being notified by the preferred shareholders (upon the expiration of thirty (30) days which is earlier); or(iii)The principal business of the Group companies suffered a material adverse effect or become unable to carry on as the principalbusiness of Group companies, as the Group companies (i) violated applicable laws, regulations, departmental rules andmandatory provisions of normative documents existing currently and enacted later, (ii) were deemed as not compliant withregulatory requirements, or (iii) were under attention or warning by relevant government departments, each of which had theadverse effect unable to eliminate and results in the business unable to carry on even after an adjustment by the Groupcompanies.Each holder of the Series A, B-1, B-2, B-3, C and C-1 preferred shares may require that the Company redeem any or all of the outstandingSeries A, B-1, B-2, B-3, C and C-1 preferred shares held by such holder with redemption price calculated on the agreed terms.10. FAIR VALUE MEASUREMENTMeasured at fair value on a recurring basisThe Company measures financial instruments held, at fair value and long-term available-for-sale securities on a recurring basis.The fair value of the Company’s financial instruments held, at fair value are determined based on the quoted market price (Level 1).The Group measured the fair value of its long-term available-for-sale securities using market approach and discounted cash flow approach, andconsidered those as Level 3 measurement because the Group used unobservable inputs to determine their fair values. The unobservable inputs werediscounts for lack of marketability for such market approach and discount rates for discounted cash flow approach as of December 31, 2019. As ofDecember 31, 2020, recent transaction price was used for market approach and discounted cash flow approach was not adopted. Significantincreases or decreases in any of those inputs in isolation would result in a significant change in fair value measurement. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 180 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-3910. FAIR VALUE MEASUREMENT (Continued)Measured at fair value on a recurring basis (Continued)As of December 31, 2019 and 2020, information about inputs for the fair value measurements of the Group’s assets that were measured at fairvalue on a recurring basis in periods subsequent to their initial recognition is as follows: As of December 31, 2019 Quoted prices inactiveSignificantmarkets forotherSignificantidenticalobservableunobservableinstrumentsinputsinputsTotal (Level 1) (Level 2) (level 3) balanceUS$US$US$US$Financial instruments held, at fair valueETFs9,096,579——9,096,579US T-bill5,527,192——5,527,192Corporate bonds257,469——257,469Accrued expenses and other current liabilities158,900——158,900Long‑term available‑for‑sale securities— — 3,980,806 3,980,806Total15,040,140 — 3,980,806 19,020,946 As of December 31, 2020 Quoted prices inactiveSignificantmarkets forotherSignificantidenticalobservableunobservableinstrumentsinputsinputsTotal (Level 1) (Level 2) (level 3) balanceUS$US$US$US$Financial instruments held, at fair value Funds283,764——283,764Corporate bonds263,750——263,750Stock15,022——15,022Long‑term available‑for‑sale securities— — 3,924,051 3,924,051Total562,536 — 3,924,051 4,486,587 Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 181 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-4010. FAIR VALUE MEASUREMENT (Continued)Measured at fair value on a non-recurring basisThe movements of Level 3 fair value measurements for the years ended December 31, 2019 and 2020 are as follows: US$As of January 1, 2019 932,251Additions during the year 3,060,113Net unrealized gains (11,558)As of December 31, 2019 3,980,806Additions during the year —Net unrealized gains 94,223Impairment (150,978)As of December 31, 2020 3,924,051As of December 31, 2019, the unrealized losses of US$11,558 was recognized as an offset of other income in the consolidated statements ofcomprehensive (loss) income. As of December 31, 2020, the unrealized gains included US$50,442 recognized in other income and US$60,000recognized in other comprehensive income (loss) in the consolidated statements of comprehensive income (loss), respectively.The Group measures the equity securities without readily determinable fair value at fair value on a nonrecurring basis whenever there is animpairment indicator or any changes resulting from observable price changes in orderly transactions for the identical or a similar investment of thesame issuer. The Group recognized nil, US$755,524 and US$150,978 impairment loss related to the long-term equity securities without readilydeterminable fair value as an offset of other income for the years ended December 31, 2018, 2019 and 2020.The Group measured the value of its share options and restricted share units granted to employees and management at fair value to determine theshare-based compensation expenses on each of the grant date. The fair value was determined using models with significant unobservable inputs(Level 3 inputs).The Group measures goodwill at fair value on a nonrecurring basis and performs a goodwill impairment test annually or more often if event occuror circumstances change that would more likely than not reduce the fair value of a reporting unit below its carry amount. The Group measuredacquired intangible assets using the income approach-discounted cash flow method when events or changes in circumstances indicate that thecarrying amount of an asset may no longer be recoverable. The Group did not recognize any impairment loss related to other intangible assetsarising from acquisitions during the years ended December 31, 2019 and 2020. The fair value of goodwill is determined using discounted cashflows, and an impairment loss will be recognized for any excess in the carrying value of goodwill over the implied fair value of goodwill. TheGroup did not recognize any impairment loss related to goodwill during the years ended December 31, 2019 and 2020. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 182 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-4111. SHARE-BASED COMPENSATIONThe Group implemented a share incentive plan in June 2014 (the “2014 Plan”) which allows the Group to grant options and restricted share units toemployees, directors and consultants of the Group. Under the 2014 Plan, the maximum aggregate number of shares that may be issued shall notexceed 187,697,314 ordinary shares.In relation with the Re-domiciliation, the Company adopted the 2018 share incentive plan, which was approved by the board of directors of theCompany to replace the previous 2014 share incentive plan created in June 2014. The terms of the 2018 share incentive plan are substantially thesame as those under the 2014 share incentive plan, except that the number of options and restricted share units and exercise price were adjusted ona diluted basis in accordance to the shares number of the Company upon the Re-domiciliation. The awards granted and outstanding under the 2014share incentive plan survived and remained effective and binding under the 2018 share incentive plan. In December 2018, the Board of Directors ofthe Company approved to expand the aggregate number of shares that may be issued to not exceed 254,697,314 ordinary shares.In March 2019, the Group implemented the 2019 Performance Incentive Plan (the “2019 Plan”), which was approved by the board of directors ofthe Company to grant a maximum number of 52,000,000 ordinary shares under the 2019 Plan.In December, 2020, 10,429,305 treasury stock repurchased under the Share Repurchase Program were approved by the board of directors of theCompany to increase the shares issuable under 2019 Plan from 52,000,000 shares to 62,429,305 shares.Share optionsThe Company has granted service-based share options, which vest and become exercisable in three installments, with 50% of the total number ofordinary shares subject to such option becoming vested and exercisable on the second anniversary of the vesting commencement date, and 25%becoming vested and exercisable on each of the third and fourth anniversary of the vesting commencement date. The grant date of the share optionsis the vesting commencement date. The Company also has granted performance-based share options with performance conditions included semi-annual performance results and operating and financial results of the Company. The performance-based share options will commence to vest oncethe performance conditions are satisfied. Upon termination of employment, all the options that have not been vested will be forfeited. The terms ofthe options shall not exceed ten years from the date of grant. In addition, the Company has the right to purchase:1.upon termination for death, disability or retirement, the employees’ vested and/or exercised options at a price of 50% of the fairmarket value as of the latest practicable date prior to the termination, within 6 months from the employees’ termination;2.upon dismissal for cause, all the employees’ vested and/or exercised option at a purchase price equals to the exercise price theemployees paid to the Company;3.upon other terminations of employment, the employees’ vested and/or exercised option at a price of 30% of the fair market valueas of the latest practicable date prior to the termination, within 6 months from the employees’ termination.As the terms permit the Company to purchase these share options at an amount that is equal to or less than the fair value, the Company evaluatesthe classification for each awards upon the occurrence of each employment termination. The termination of employees have been insignificant forall periods presented. As of December 31, 2019 and 2020, the share option award is classified as equity. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 183 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-4211. SHARE-BASED COMPENSATION (Continued)Share options (Continued)The Group calculated the estimated fair value of the options on the respective grant dates using the binomial-lattice option valuation model with thefollowing assumptions for each applicable period which took into account variables such as volatility, dividend yield, and risk-free interest rate, theprobability that the option will be exercised prior to the end of its contractual life, and the probability of termination or retirement of the optionholder in computing the value of the option.The fair value of the options granted was estimated on the date of grant that prepared by the management with the assistance of an independentthird-party appraiser, and was determined using a binomial model with the following assumptions: Fair value per ordinary shareExerciseExpectedContractualRisk‑freeExpectedat grant date(1)price(2)volatility(3)life(4)interest rate(5)dividend(6)US$US$Granted in 2014 0.008 0.00001 40% 10 years 3.0-3.1% 0.0Granted in 20150.008-0.0160.0000139% 10 years2.5-3.1% 0.0Granted in 20160.019-0.0300.0000139% 10 years2.3-3% 0.0Granted in 20170.034-0.0590.00001-0.04039% 10 years3.0-3.2% 0.0Granted in 20180.147-0.4050.0001-0.20035-38% 10 years3.1-3.8% 0.0Granted in 20190.274-0.4840.00001-0.27437-39% 10 years3.0-3.4% 0.0(1)Fair value of underlying ordinary shares. Prior to the completion of initial public offering, the estimated fair value of the ordinary sharesunderlying the options as of the respective grant dates was determined based on a valuation with the assistance of a third party appraiser. Thefair value of the underlying ordinary shares is determined based on the closing market price of the share after the completion of initial publicoffering in March 2019.(2)Exercise price. The exercise price of the options was determined by the Company’s Board of Directors.(3)Volatility. The volatility of the underlying ordinary shares was estimated based on the historical share price movement of the comparablecompanies for the period of time close to the expected time to exercise.(4)Contractual life. The contractual life of the share options was the period between the grant date and the expiry date.(5)Risk free rate. Risk free rate is estimated based on market yield of U.S. Sovereign Curve with maturity close to the share options as of thevaluation date, plus country spread.(6)Expected dividend. The Company does not expect to declare any dividends in the foreseeable future. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 184 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-4311. SHARE-BASED COMPENSATION (Continued)Share options (Continued)A summary of the Company’s share option activities for the years ended December 31, 2019 and 2020 is presented below: Weighted Weighted Number ofaverageaverageAggregateshareexerciseremainingintrinsicoptionspricecontractual lifevalueUS$YearsUS$Outstanding as of January 1, 2019136,028,000 0.01666 7.27 74,861,376Granted61,267,744 0.06276 Exercised(82,857,500) 0.00001 Forfeited(18,505,000) 0.02597 Outstanding as of December 31, 2019 95,933,244 0.05223 8.46 17,694,050Cancelled to grant RSUs (7,660,000) 0.27400 Exercised(16,688,995)0.00031Forfeited(11,840,000)0.09374Outstanding as of December 31, 2020 59,744,249 0.03005 7.50 29,829,248The aggregate intrinsic value is calculated as the difference between the exercise price of the awards and the fair value of the underlying ordinaryshares at each reporting date, for those awards that had exercise price below the estimated fair value of the relevant ordinary shares.The Group recognized share-based compensation expenses with no income tax benefit relating to the share options of US$1,522,271,US$2,239,136 and US$1,701,132 for the years ended December 31, 2018, 2019 and 2020, respectively. As of December 31, 2020, totalunrecognized share-based compensation expenses relating to these share options was US$12,723,928. The expense is expected to be recognizedover a weighted-average period of 3.5 years. RSUsOn April 30, 2020, the Company cancelled 7,660,000 stock options and 900,000 RSUs granted historically, and granted 8,560,000 RSUs toemployee on May 1, 2020. Those restricted shares vest over a period of 3 to 3.5 years. The cancellation of stock options and RSUs accompanied by the concurrent grant of a replacement RSUs is accounted for as a modification. The incremental share-based compensation of this replacement is US$0.8 million. Total amount of unrecognized share-based compensation of unvested options and RSUs and incremental share-based compensation is US$1.7 million. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 185 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-4411. SHARE-BASED COMPENSATION (Continued)RSUs (Continued)A summary of the Company’s RSU activities for the years ended December 31, 2019 and 2020 is presented below: Weighted-AverageNumber of UnitsGrant-Date Fair Value US$Unvested as of January 1, 201910,800,000 0.33Granted20,019,012 0.36Exercised(2,412,032) 0.47Unvested as of December 31, 2019 28,406,980 0.34Granted44,179,5900.23Cancelled to grant new RSUs(900,000)0.26Exercised(449,990)0.23Forfeited(1,410,000)0.20Unvested as of December 31, 2020 69,826,580 0.28The Group recognized share-based compensation expenses with no income tax benefit relating to RSUs (including the expense upon medication) ofUS$324,565, US$1,823,464 and US$4,353,480 for the years ended December 31, 2018, 2019 and 2020, respectively. As of December 31, 2020,total unrecognized share-based compensation expenses relating to these RSUs was US$14,296,333. The expense is expected to be recognized overa weighted average period of 2.9 years.12. NET INCOME (LOSS) PER SHAREFor the purpose of calculating net income (loss) per share as a result of the Re-domiciliation as described in Note 1, the number of shares used inthe calculation reflects the outstanding shares of the Company as if the Re-domiciliation took place at the earliest period presented.The following table sets forth the computation of basic and diluted net income (loss) per share for the following years: For the years ended December 31,201820192020 US$ US$ US$Numerator:Net income (loss) attributable to ordinary shareholders of UP Fintech Holding Limited (43,207,732) (6,589,431) 16,064,793Denominator: Weighted average shares used in calculating net income (loss) per ordinary shares Basic506,393,1981,751,784,1762,117,904,025Diluted 506,393,198 1,751,784,176 2,162,232,325Net income (loss) per ordinary shares Basic(0.09)(0.00)0.01Diluted (0.09) (0.00) 0.01 Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 186 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-4512. NET INCOME (LOSS) PER SHARE (Continued)The following table summarizes potential ordinary shares outstanding excluded from the computation of diluted net loss per ordinary share for theyears ended December 31, 2018, 2019, because their effect is anti-dilutive:For the years ended December 31, 2018 2019Share issuable upon exercise of share options 136,028,000 95,933,244Share issuable upon exercise of RSUs 10,800,000 28,406,980Share issuable upon conversion of Series Angel preferred shares 419,736,104 —Share issuable upon conversion of Series A preferred shares 279,389,307 —Share issuable upon conversion of Series B-1 preferred shares 188,378,334 —Share issuable upon conversion of Series B-2 preferred shares 76,812,654 —Share issuable upon conversion of Series B-3 preferred shares 147,755,566 —Share issuable upon conversion of Series C preferred shares 98,834,937 —Share issuable upon conversion of Series C-1 preferred shares 18,597,738 —13. TREASURY STOCKOn March 25, 2020, the Company’s Board of Directors approved a share repurchase program. Under the terms of the approved program (“ShareRepurchase Program”), the Company may repurchase US$20 million worth of its outstanding ADSs from time to time for a period not to exceedtwelve months. As of December 31, 2020, the Company had repurchased an aggregate of 10,429,305 ordinary shares under the Share RepurchaseProgram in the open market, at an average price of US$3.13 per ADS, or US$0.21 per share for a total consideration of US$2.2 million.As of December 31, 2020, 10,429,305 Class A ordinary shares were repurchased and recorded at historical purchase cost of US$2.2 million. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 187 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-4614. RELATED PARTY BALANCES AND TRANSACTIONS As of December 31,Name Relationship with the Group 2019 2020US$ US$Amounts due from related parties: Xiaomi Corporation and its affiliates (1)Principal shareholder of theCompany397,590 —Alphalion Technology Holding Limited and its affiliates(“Alphalion Group”)(2)Long-term available-for-saleinvestee886,844 1,032,211Fast Connection Limited(3)Entity controlled by a principalshareholder of the Company2,200,000 1,500,000Ocean Joy and its subsidiary(4) Equity method investee— 1,044,738Individual directors and executive officers(5) Directors or officers of the Group—1,488,273Subtotal3,484,4345,065,222 Receivables from brokers, dealers, and clearingorganizations:Interactive Brokers LLC (6) Under common control with aprincipal shareholder of theCompany185,047,211 761,681,403Ocean Joy and its subsidiary (7) Equity method investee— 2,637,529Subtotal185,047,211 764,318,932(1)The amount represents the Group’s prepaid marketing expense to Xiaomi Corporation and its affiliates, and all prepaid marketing expenseshad been consumed in this current period.(2)The amount represents short-term, interest-free loans provided to Alphalion Group to facilitate it's daily operational cash flow needs as ofDecember 31, 2019 and 2020.(3)The amount represents the Group's prepaid consulting fee to Fast Connection Limited as of December 31, 2019 and 2020.(4)The amounts of US$386,940 (HKD3,000,000) and US$657,798 (HKD5,100,000) represent short-term, interest-free loans provided to OceanJoy and its subsidiary Ocean Joy Securities Limited, respectively, to facilitate their daily operational cash flow needs as of December 31, 2020.The aforementioned loans included an amount of US$192,615 (HKD1,500,000) transferred from prepayment for long-term investment as ofDecember 31, 2019.(5)The Group provided brokerage services and margin loans to its individual directors and executive officers during its ordinary courses ofbusiness. The amounts represent receivables from directors and executive officers of the Group as of December 31, 2019 and 2020respectively.(6)The amount represents the Group’s customer deposit, revenue receivables and securities lending transactions from the Company's tradeexecution partner and principal shareholder, Interactive Brokers.(7)The amount represents the Group’s customer deposit and revenue receivables deposited in Ocean Joy Securities Limited as the executionpartner. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 188 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-4714. RELATED PARTY BALANCES AND TRANSACTIONS (Continued)As of December 31,NameRelationship with the Group20192020 US$ US$Payables to brokers, dealers and clearing organizations-Related parties:Interactive Brokers LLC (8) Under common control with a principalshareholder of the Company 53,774,882 218,563,624Ocean Joy and its subsidiary (9) Equity method investee—10,496 53,774,882 218,574,120(8)The amount represents the Group’s margin and cash collaterals received from securities borrowing transactions for the Company's tradeexecution partner and principal shareholder, Interactive Brokers.(9)The amount represents the Group’s service fee payables to Ocean Joy Holdings Limited and its subsidiary.Transactions with related parties: For the years endedDecember 31,Name Relationship with the Group 2018 2019 2020 US$US$ US$Xiaomi Corporation and its affiliates (10)Principal shareholder of the Company1,297,395517,134397,590Alphalion Group (11)Long-term available-for-sale investee—617,500—Fast Connection Limited (12)Entity controlled by a principal shareholder of the Company——700,000Ocean Joy and its subsidiary (13)Equity method investee——16,173Ocean Joy and its subsidiary (14)Equity method investee——51,446Interactive Brokers LLC (15)Under common control with a principal shareholder of the Company19,664,76338,089,98262,704,986Interactive Brokers LLC (16)Under common control with a principal shareholder of the Company210,5352,102,3857,099,254Guangzhou 88 (17)Entity controlled by management of the Company’s subsidiary —755,524 —Individual directors and executive officers(18)Directors or officers of the Group —— 79,949(10)The amounts represent the purchase of marketing services from Xiaomi Corporation and its affiliates for the years ended December 31, 2018,2019 and 2020, respectively.(11)The amount represents the sale of a Group's subsidiary to Alphalion Group for a gain of US$617,500 in 2019 with a consideration for the saleof US$106,105. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 189 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-4814. RELATED PARTY BALANCES AND TRANSACTIONS (Continued)(12)The amounts represent consulting fees paid to Fast Connection Limited for the year ended December 31, 2020.(13)The amounts represent the commissions earned from Ocean Joy Securities Limited for periods from June of 2020 to December 31, 2020.(14)The amounts represent the execution and clearing fees paid to Ocean Joy Securities Limited for periods from June of 2020 to December 31,2020.(15)The amounts represent the commissions, financing service fees, interest income and other revenues earned from Interactive Brokers forperiods from June of 2018, when Interactive Brokers became the Company's shareholder to December 31, 2018, for the years ended December31, 2019 and 2020, respectively, netting off interest expense incurred from margin, security borrowing and lending business.(16)The amounts represent the execution and clearing fees paid to Interactive Brokers for periods from June of 2018, when Interactive Brokersbecame the Company's principal shareholder to December 31, 2018, and for the years ended December 31, 2019 and 2020, respectively.(17)The amounts represent the Company's impairment loss on equity investment in Guangzhou 88. The Company has converted its short-term,interest-free loans provided to Guangzhou 88 into equity interests and measured at long-term equity securities without readily determinablefair value. Guangzhou 88 was a software development company that principally engaged in providing investor events information. In the yearof 2019, the equity investment was fully impaired due to the operating difficulties of Guangzhou 88 which subsequently dissolved in February2020.(18)The amounts represent the commissions and interest income earned by providing brokerage services and margin loans to the individualdirectors and executive officers during its ordinary courses of business for the years ended December 31, 2018, 2019 and 2020, respectively.15. COLLATERALIZED TRANSACTIONSThe Group accepted collateral in connection with client margin loans and security borrowing and lending transactions for consolidated accountcustomers. The Group monitors required margin and collateral level on a daily basis in compliance with regulatory and internal guidelines andcontrols its risk exposure through financial, credit, legal reporting system. Under applicable agreements, customers are required to depositadditional collateral or reduce holding positions, when necessary to avoid forced liquidation of their positions. Pursuant to the authorizationobtained from margin clients, the Group further repledges the collaterals to other financial institutions to obtain the funding for the margintransactions.Margin loans are extended to customers on demand and are not committed facilities. Underlying collateral for margin loans is evaluated withrespect to the liquidity of the collateral positions, valuation of securities, volatility analysis and an evaluation of industry concentrations. TheGroup’s collateral policies minimize the Group’s credit exposure to margin loans in the event of a customer’s default.For the Group’s securities borrowing and lending transactions which require to deposit cash collateral with the securities lenders and receive thecash collateral from the borrowers, the cash collateral is generally in excess of the market value of the securities borrowed and lent. The Groupmonitors the market value of securities borrowed and lent on a daily basis, with additional collateral obtained or refunded as permittedcontractually. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 190 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-4915. COLLATERALIZED TRANSACTIONS (Continued)The following table summarizes the amounts related to collateralized transactions as of December 31, 2019 and 2020: As of December 31, 2019 2020US$US$Total client margin asset 332,460,879 1,626,260,131Fulfillment of client margin financings 42,704,203 168,840,684Fulfillment of client short sales 10,815,155 21,492,878Securities lending to other brokers 55,098,508 434,780,528Total collateral repledged 108,617,866 625,114,09016. LeaseOperating leasesThe Group’s leases consist of operating leases for corporate offices, data centers, and other facilities. The Group determines if an arrangement is alease at inception. Some lease agreements contain lease and non-lease components, which the Group choose to account for as separate components.The allocation of the consideration between the lease and the non-lease components is based on the relative stand-alone prices of lease componentsincluded in the lease contracts. As of December 31, 2020, the Group had no long-term leases that were classified as a financing lease. As ofDecember 31, 2020 the operating leases that have not yet commenced is immaterial. The arrangements of remaining lease terms are one year to tenyears. Total lease expenses for the year ended December 31, 2019 and 2020 was US$2,692,632 and US$3,494,456, which were recorded inoccupancy, depreciation and amortization on the consolidated statements of comprehensive income (loss). The Group classify operating leasepayments as cash outflows for operating activities in the statement of cash flows. And the Group present the reduction in the carrying amount of theright-of-use assets and the change in operating lease liabilities as two adjustments to net income and changes in net assets in the reconciliation ofnet income to net cash flows from operating activities.The following table presents balances reported in the consolidated balance sheets related to the Group’s leases:For the years ended December 31, 2019 2020US$US$Operating lease right-of-use assets 5,732,559 7,280,763Operating lease liabilities 5,841,658 7,207,293The following table presents operating lease expenses and short-term lease expenses reported in the consolidated statements of comprehensiveincome (loss) related to the Group's leases:For the years ended December 31, 2019 2020US$US$Operating lease expenses 2,313,802 2,985,665Short-term lease expenses 378,830 508,791 Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 191 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-5016. Lease (Continued)Operating leases (Continued)A summary of supplemental information related to operating leases as of December 31, 2020 is as follows: For the years ended December 31, 2019 2020 US$US$ Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases 2,389,5153,422,191Non-cash right-of-use assets in exchange for new lease obligations:Operating leases5,050,6424,281,660Weighted average remaining lease term:Operating leases4 years3 yearsWeighted average discount rate:Operating leases6.0%5.3%The following is a maturity analysis of the annual undiscounted cash flows for the annual periods ended December 31:As of December 31, 2020 US$Years ending December 31:20213,524,55320222,365,7662023717,7152024510,6482025144,3052026 and after484,253Total undiscounted operating lease payments7,747,240Less: imputed interest539,947Present value of operating lease liabilities7,207,293 As of December 31, 2019US$Years ending December 31: 2020 2,672,5682021 1,380,7252022 867,8402023578,4222024488,3892025 and after561,804Total undiscounted operating lease payments6,549,748Less: imputed interest708,090Present value of operating lease liabilities 5,841,658The terms of the leases do not contain contingent rents. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 192 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-5117. COMMITMENTS AND CONTINGENCYCapital commitmentsIn April 2019, the Company entered into a sale and purchase agreement to acquire 100% equity interest of a company located in Hong Kong in atotal consideration of US$1,540,555 (HK$12,000,000). As of December 31, 2020, the Company has paid US$464,958(HK$3,600,000) andobtained 30% of the total equity interest. The closing of the acquisition is subject to the approval of changes of control from local regulatoryauthorities. The acquisition is not yet closed and the capital commitment contracted but not paid was US$1,078,389 (HK$8,400,000).18. REGULATORY REQUIREMENTThe Company’s broker-dealer subsidiaries, TBNZ, Marsco, US Tiger Securities and Tiger Brokers SG are subject to capital requirementsdetermined by its respective regulators.TBNZ, the Company’s New Zealand subsidiary, is subject to New Zealand’s Exchange (“NZX”) capital adequacy requirements under the Section 19, NZX Participant Rules, by which TBNZ’s current financial health is measured by assessing its capital adequacy against the risks it is exposed to. At all times TBNZ must maintain its net capital (described as “net tangible current assets” or “NTCA” under NZX’s rule), at a level equal to, or greater than the net capital requirement (described as “prescribed minimum capital adequacy” or “PMCA”). Marsco and US Tiger Securities, the Company’s USA subsidiaries, are subject to the Uniform Net Capital Rule (Rule 15c3-1) under the ExchangeAct in the USA, which requires the maintenance of minimum net capital.Tiger Brokers SG, the Company’s Singapore subsidiary, is subject to the Securities and Futures Regulations 2018 (Amendment) Regulation 2018under Chapter 289 of Securities and Futures Act in Singapore, which requires the maintenance of minimum net capital.As of December 31, 2019 and 2020, all of the Company’s broker-dealer subsidiaries met applicable minimum net capital requirements. The tablesbelow summaries the net capital, the capital requirement and the excess net capital for the Company’s broker-dealer subsidiaries as of December31, 2019 and 2020: Net Capital Requirement Excess Net CapitalDecember 31, 2019US$US$US$TBNZ26,633,57517,279,4619,354,114Marsco15,224,882250,00014,974,882US Tiger Securities4,227,994100,0004,127,994Tiger Brokers SG1,615,957823,313792,644Total47,702,40818,452,77429,249,634 Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 193 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-5218. REGULATORY REQUIREMENT (Continued) Net Capital Requirement Excess Net CapitalDecember 31, 2020US$US$US$TBNZ61,427,61334,258,41127,169,202Marsco14,546,628250,00014,296,628US Tiger Securities9,206,613250,0008,956,613Tiger Brokers SG9,718,8252,382,7177,336,108Total94,899,67937,141,12857,758,55119. EMPLOYEE BENEFIT PLANFull time PRC employees of the Group are eligible to participate in a government-mandated multi-employer defined contribution plan under whichcertain pension benefits, medical care, unemployment insurance and employee housing fund are provided to these employees. The PRC laborregulations require the Group to accrue for these benefits based on a percentage of each employee’s salary income. Total provisions for employeebenefits were US$4,332,246, US$5,618,209 and US$4,323,814 for the years ended December 31, 2018, 2019 and 2020, respectively, reported as acomponent of salary and compensation expenses when incurred.20. STATUTORY RESERVES AND RESTRICTED NET ASSETSIn accordance with the PRC laws and regulations, the Group’s subsidiaries located in the PRC, are required to provide for certain statutory reserves.These statutory reserve funds include one or more of the following: (i) a general reserve, (ii) an enterprise expansion fund or discretionary reservefund, and (iii) a staff bonus and welfare fund. Subject to certain cumulative limits, the general reserve fund requires a minimum annualappropriation of 10% of after-tax profit (as determined under accounting principles generally accepted in China at each year-end); the other fundappropriations are at the subsidiaries’ or the affiliated PRC entities’ discretion. These statutory reserve funds can only be used for specific purposesof enterprise expansion, staff bonus and welfare, and are not distributable as cash dividends except in the event of liquidation of Group’ssubsidiaries, affiliated PRC entities and their respective subsidiaries. The Group’s subsidiaries are required to allocate at least 10% of their after-taxprofits to the general reserve until such reserve has reached 50% of their respective registered capital. As of December 31, 2018, none of theGroup’s PRC subsidiaries has a general reserve that reached 50% of their registered capital threshold. The Group did not made appropriation tothese statutory reserve funds due to the loss position of the Group’s PRC subsidiaries for the year ended December 31, 2018.For the year ended December 31, 2019, Beijing U-Tiger Business made appropriation to these statutory reserve funds of US$724,008 due to theprofit position, which also reached the maximum required amount of 50% of its registered capital.For the year ended December 31, 2020, Beijing XSYX Business made appropriation to these statutory reserve funds of US$1,939,543 due to theprofit position, which was not reached the maximum required amount of 50% of its registered capital.Appropriations to the enterprise expansion reserve and the staff welfare and bonus reserve are to be made at the discretion of the Board of Directorsof each of the Group’s subsidiaries.As a result of these PRC laws and regulations and the requirement that distributions by the PRC entities can only be paid out of distributable profitscomputed in accordance with the PRC GAAP, the PRC entities are restricted from transferring a portion of their net assets to the Group. Amountsrestricted include paid-in capital and the statutory reserves of the Group’s PRC subsidiaries. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231x20f.htm Type: 20-F Pg: 194 of 194 Table of ContentsUP FINTECH HOLDING LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(All amounts in U.S. dollars (“US$”), except for share, per share data, or otherwise noted)F-5320. STATUTORY RESERVES AND RESTRICTED NET ASSETS (Continued)The aggregate amounts of capital and statutory reserves restricted which represented the amount of net assets of the relevant subsidiaries in theGroup not available for distribution were US$40,221,504 and US$48,315,519 as of December 31, 2019 and 2020, respectively.21. SEGMENT INFORMATIONSegments are business units that offer different services and are reviewed separately by the chief operating decision maker (the “CODM”), or thedecision-making group, in deciding how to allocate resources and in assessing performance. The CODM, who is responsible for allocatingresources and assessing performance of the operating segment, has been identified as the Group’s Chief Executive Officer. The Group operates as asingle operating segment. The single operating segment is reported in a manner consistent with the internal reporting provided to the CODM.22. SUBSEQUENT EVENTThe Group has evaluated subsequent events through April 27, 2021, which is the date when the audited consolidated financial statements wereissued.On February 9, 2021, a group of investors led by an affiliate of Xiaomi Corporation has subscribed to purchase convertible notes in an aggregateprincipal amount of US$65 million through a private placement. Consummation of the placement of the convertible notes is subject to satisfactionof customary closing conditions. The convertible notes to be issued will mature in 2026 unless previously converted.On April 5, 2021, a group of investors has subscribed to purchase convertible notes in an aggregate principal amount of US$90 million through aprivate placement. Consummation of the placement of the convertible notes is subject to satisfaction of customary closing conditions. Theconvertible notes to be issued will mature in 2026 unless previously converted. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 1 of 53 1Exhibit 4.3Equity Pledge ContractThis equity pledge contract (“Contract”) is made by the following parties in Beijing, China on April 13，2021:Party A: Beijing Bohu Xiangshang Technology Co.,LTD., having its registered address at Room 807, 8th floor, GandyvicBuilding, NO.1 building, NO. 16 Tai Yang Gong Middle Road, Chaoyang District, Beijing, China (“Pledgee”);Party B: the shareholders set forth in Exhibit 2 (List of Shareholders of Beijing Xiangshang Rongke Technology andDevelopment Co., Ltd) attached hereto (collectively as “Pledgors”); andParty C: Beijing Xiangshang Rongke Technology and Development Co., Ltd, a limited liability company incorporatedaccording to the laws of China, having its uniform social code 91110105397574386P, and its domicile at 005A-5319,Building D, No. 28A, Xinxi Road, Haidian District, Beijing.For purpose hereof, each of Party A, Party B and Party C is hereinafter referred to individually as a “Party”, andcollectively as the “Parties”.Whereas,1.Party C is a limited liability company registered in Yinchuan City, Ningxia Province, China. The Pledgors hold 100%equity in Party C.2.The Pledgee is a limited liability company duly incorporated and validly existing according to the laws of China. ThePledgee and Party C entered into a series of Transaction Documents (as defined below) on June 7, 2018 and thesigning date of this contract;3.To guarantee that Party C and the Pledgors will perform the obligations under the Transaction Documents, thePledgors create a pledge over 100% equity in Party C in favor of the Pledgee;4.Party C acknowledges the rights and obligations of the Pledgors and the Pledgee hereunder, and agrees to provideany assistance required for registration of the pledge.Therefore, the Parties agree to enter into this Contract as follows:1.DefinitionsUnless this Contract stipulates otherwise, the terms below shall have the following meanings:1.1“Pledge” means the security interest created by the Pledgors in favor of the Pledgee according to Clause 2 hereof,that is the right of the Pledgee to be first Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 2 of 53 2paid from the proceeds of transfer, auction or sale of the equity of the Pledgors.1.2“Equity” means the 100% equity currently held by the Pledgors legally in Party C, i.e., the equity of the Pledgorsset forth in the table below:No.ShareholderSubscribed Contribution(RMB: ten thousand)Shareholding Percentage1.Wu Tianhua214.35524416.8756%2.Yang Ke86.7730556.8314%3.Dong Ming4.5879070.3612%4.Sun Yang5.7012200.4488%5.Lin Xueping13.8313001.0889%6.Beijing Haozhong Management ConsultingCenter (Limited Partnership)221.88531217.4684%7.Xiaochang Shuimu Investment Center(Limited Partnership)147.80573911.6363%8.Beijing Oumu Lianghe InvestmentManagement Co., Ltd.4.8047950.3783%9.Beijing Ganquan Huizhi Assets ManagementCo., Ltd.2.6885880.2117%10.Tianjin Zhenge Tianfeng Investment Center(Limited Partnership)18.7341761.4749%11.Tianjin Ronghui Hetou EnterpriseManagement Partnership (LimitedPartnership)1.0870120.0856%12.Beijing Tiaozhan Management Consulting Co.,Ltd.9.3670880.7374%13.Beijing Qianxian Shidai InvestmentManagement Co., Ltd.8.5006320.6692%14.Horgos Tiaozhanzhe Venture Capital Co., Ltd.0.8664560.0682%15.Hangzhou Xianfeng Investment Partnership(Limited Partnership)6.7146500.5286%16.Chengdu Nibilu Technology Co., Ltd.13.4293001.0572% Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 3 of 53 317.Beijing Pansheng Investment ManagementCo., Ltd.24.2864821.9120%18.Beijing Mosi Investment Co., Ltd.17.5590311.3824%19.Beijing Lingfeng Investment Center (LimitedPartnership)58.5109144.6064%20.Tianjin Jinmi Investment Partnership (LimitedPartnership)186.59750314.6903%21.Beijing Huagai Venture Equity InvestmentDevelopment Partnership (LimitedPartnership)48.7804883.8403%22.Shenzhen Xianfeng Growth InvestmentPartnership (Limited Partnership)12.1951220.9601%23.Ningxia Wayne Equity Investment Fund(Limited Partnership)49.0853663.8643%24.Zhenzhi Chengyuan Equity Investment Centerof Ningbo Meishan Bonded Port Area(Limited Partnership)23.4913631.8494%25.Gongqingcheng Dianliang InvestmentManagement Partnership (LimitedPartnership)36.5853662.8803%26.Gongqingcheng Shanglin InvestmentManagement Partnership (LimitedPartnership)51.9868044.0928%Total1,270.210913100.0000%1.3“Pledge Period” means the period specified in Clause 3 hereof.1.4“Transaction Documents” means the Exclusive Business Cooperation Agreement, the Exclusive Option Contractand the Power of Attorney executed by the Pledgee, Party C and/or the Pledgors on June 7, 2018 and the signingdate of this contract, the Commitment Letters issued by the Pledgors to the Pledgee on June 7, 2018 and thesigning date of this contract, and this Contract.1.5“Breach Event” means any of the circumstances set out in Clause 7 hereof.1.6“Breach Notice” means the notice of Breach Events issued by the Pledgee Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 4 of 53 4according to this Contract.2.Pledge2.1As a security for prompt and full performance of all obligations (including but not limited to the consulting feeand/or service fee payable to the Pledgee according to the Exclusive Business Cooperation Agreement) of Party Cand the Pledgors under the Transaction Documents when they become due (whether on the specified due date,through early repayment, or otherwise), the Pledgors hereby create a pledge over their entire equity in Party C infavor of the Pledgee.2.2The Pledge will cover all service fees receivable by the Pledgee under the Transaction Documents and theirinterest, liquidated damages (if any), damages, and various costs and expenses for realizing the pledge (includingbut not limited to attorney’s fee, arbitration cost, and the costs for assessment and auction of the pledged equity).2.3During the Pledge Period, any distribution of dividend or bonus shall be subject to prior written consent of thePledgee. Where any distribution of dividend or bonus is made upon consent of the Pledgee, the Pledgee has theright to receive the dividend or bonus generated from the Equity. At the request of the Pledgee, the dividend orbonus received by the Pledgee in connection of the Equity, after deducting the individual income tax payable bythe Pledgors, shall be (1) deposited to the account designated by the Pledgee, supervised by the Pledgee, and usedfor securing performance of the contractual obligations and first payment of the secured debts; or (2) givenunconditionally to the Pledgee or any person designated by the Pledgee free of consideration, subject to the lawsof China.2.4The Pledgors shall not increase the share capital of Party C without prior written consent of the Pledgee. Anyadditional amount in the registered capital of Party C from increased contribution of the Pledgors shall be subjectto the equity pledge hereunder.If Party C is required to be dissolved or liquidated according to any mandatory provisions of China laws, thebenefit received by the Pledgors from distribution made by Party C according to laws upon completion of thedissolution or liquidation procedure of Party C shall be, at the request of the Pledgee, (1) deposited to the accountdesignated by the Pledgee, supervised by the Pledgee, and used for securing performance of the contractualobligations and first payment of the secured debts; or (2) given unconditionally to the Pledgee or any persondesignated by the Pledgee free of consideration, subject to the laws of China.3.Pledge Period3.1The Pledge Period commences on the execution of this Contract and ends when all obligations of Party C and thePledgors under the Transaction Documents are fully performed. During the Pledge Period, if Party C and thePledgors fail to perform or to fully perform their obligations under the Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 5 of 53 5Transaction Documents, the Pledgee shall have the right (but not obligation) to dispose of the Equity according tothe provisions hereof.3.2The Pledge shall be created when it is registered with the administration for industry and commerce at the placeof Party C (“Registration Authority”). The Parties agree that the Pledgors and the Pledgee shall submit theregistration application for creation of equity pledge with the Registration Authority according to the Measures forthe Registration of Equity Pledge at Administrative Departments for Industry and Commerce within seven (7) workingdays as of execution hereof or any longer period consented by the Pledgee in writing. The Pledgors and thePledgee shall use their best efforts to complete the registration of the Pledge over the entire Equity of Party Chereunder with the Registration Authority, receive the registration notice from the Registration Authority, andensure the Registration Authority record the equity pledge completely and accurately in the equity pledgeregister.4.Keeping of Equity Records4.1The Pledgors shall record the equity pledge specified herein in the register of shareholders of Party C as ofexecution of this Contract, and deliver the original contribution certificates and the original register ofshareholders recording the equity pledge to the Pledgee for keeping. The Pledgee shall keep such documentsduring the whole Pledge Period specified herein.4.2During the Pledge Period, the Pledgee shall have the right to receive all revenues, if any, of the pledged equity,including but not limited to bonus, dividend and other revenues generated from the pledged equity.5.Representations and Warranties of the PledgorsEach Pledgor severally (but not jointly) represents and warrants to the Pledgee as follows:5.1Except for those circumstances disclosed to the Pledgee, it/he is the sole legal and beneficial owner of the Equityand has legal, full and complete ownership to the Equity, subject to any agreement entered into between it/heand the Pledgee.5.2It/he has the power to enter into this Contract and to perform obligations hereunder; the terms of this Contracthas legal binding force upon it/him as from the effective date of this Contract.5.3It/he shall have the right to dispose of and transfer its Equity according to the terms hereof.5.4Except for the Pledge hereof, it/he has not created any security interest or other encumbrances over its/hisEquity, the ownership to the Equity is free of any actual or threatened dispute, lien or other proceduralrestrictions, and may be pledged and transferred according to the applicable laws.5.5The execution hereof, exercise any right hereunder and performance of any Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 6 of 53 6obligation hereunder by the Pledgor will not violate any laws, regulations, or any agreement or contract to whichthe Pledgor is a party, or any commitment made by the Pledgor to any third party.5.6All documents, information, statements and certificates (if applicable) provided by the Pledgor to the Pledgee areaccurate, true, complete and valid.5.7The Pledgor warrants to the Pledgee that it has made all proper arrangements and executed all necessarydocuments to ensure that performance of this Contract will not be affected or prevented by its/his heir, guardian,successor in title, creditor, spouse or other person that may acquire its/his Equity or relevant right when it/hedies, is dissolved, becomes incapacitated, goes into bankruptcy, is divorced, or has other circumstance that mayaffect exercise of Equity.5.8Each Pledgor severally but not jointly warrants to the Pledgee that the above representations and warranties shallbe true and correct and will be complied with before the contractual obligations are fully performed or thesecured debts are completed satisfied.Party C represents and warrants to the Pledgee as follows:5.9Party C is a limited liability company duly incorporated and validly existing according to the laws of China, whohas separate legal personality and full and independent legal status and capacity to execute, deliver and performthis Contract.5.10This Contract has been duly signed by Party C, and constitutes legal, valid and binding obligations of Party C.5.11Party C has full internal power and authority to execute and deliver this Contract and all other documentsrelating to the transaction contemplated herein, and has full power and authority to consummate the transactioncontemplated herein.5.12There is no security interest or other encumbrances over Party C’s assets which may affect the Pledgee’s rights orinterests in the Equity, including but not limited to transfer of Party C’s intellectual property or transfer of anyParty C’s asset with a value of RMB 500000 or more outside the normal course of business, or any encumbrancesover the property or use right to such assets.5.13There is no pending or, to the knowledge of Party C, threatened litigation, arbitration or other legal proceedingsof any court or arbitral tribunal, or any administrative procedure or penalty of any government authority oradministrative agency over the Equity, Party C or its assets, which may have material or adverse effect on PartyC’s economic conditions or any Pledgor’s ability to perform any obligation hereunder or any liability of security.5.14Party C hereby warrants to the Pledgee that the above representations and warranties shall be true and correctand shall be fully complied with before Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 7 of 53 7the obligations hereunder are fully performed or the secured debts hereunder are fully satisfied.6.Further Covenants and Consents of the Pledgors and Party CThe Pledgors further consent and covenant as follows:6.1During the term hereof, each Pledgor hereby severally but not jointly covenants to the Pledgee that the Pledgor6.1.1shall not transfer the Equity or create or permit existence of any security interest or other encumbrancethat may affect any right or interest of the Pledgee in the Equity without prior written consent of thePledgee, except for performance of the Exclusive Option Contract entered into by the Pledgor, the Pledgeeand Party C on June 7, 2018;6.1.2Shall immediately notify the Pledgee of (1) any event that may affect the right of the Pledgee to the Equityor any part of the Equity, or any notice thereof, and (2) any event that may affect any guarantee or otherobligation of the Pledgor resulting from this Contract, or any notice thereof.6.2Each Pledgor severally agrees that any right of the Pledgee to the Pledge herein shall not be interrupted orhindered by the Pledgor or its/his heir, successor or representative or any other person through any legalprocedure.6.3To protect and perfect any security interest granted hereunder, each Pledgor hereby undertakes to execute ingood faith, and to procure other parties having interest in the Pledge to execute, all certificates, agreements, deedsand/or undertakings required by the Pledgee. The Pledgor further undertakes to take, and to procure any otherparties having interest in the Pledge to take, any acts required by the Pledgee, to promote the Pledgee to exerciseany right and authority granted hereunder, and enter into all relevant documents relating to ownership to theEquity with the Pledgee or any person designated by the Pledgee (whether natural person or legal person). ThePledgor undertakes to provide the Pledgee with all notices, orders and decisions required by the Pledgee within areasonable period.6.4Each Pledgor hereby covenants to the Pledgee that it/he will comply with and perform all warranties, covenants,agreements, representations and conditions hereunder. If the Pledgor fails to perform such warranties, covenants,agreements, representations and conditions in whole or in part, it/he shall compensate the Pledgee for all lossescaused thereby.6.5If the pledged equity hereunder is subject to any coercive measures by any court or other government departmentfor any reason, the Pledgor shall use all efforts, including but not limited to providing other security or takingother measures to the court, to lift such coercive measures taken by the court or other department over the aboveequity.6.6In the event that the value of any Equity held by any Pledgor may decrease Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 8 of 53 8and will thus endanger the Pledgee’s right, the pledgee may request the Pledgor to provide additional mortgageor other security. If the Pledgor fails to provide, the Pledgee may auction or sell the Equity at any time, and usethe proceeds from such auction or sale to early repay the secured debts or place the proceeds in escrow.6.7The Pledgors and/or Party C shall not increase, reduce or transfer, or assist others to increase, reduce or transfer,Party C’s registered capital (or their contributions to Party C), or create any encumbrances thereon, without priorwritten consent of the Pledgee. Subject to the previous sentence, any Party C’s Equity registered and obtainedafter the date hereof shall be referred to as “Additional Equity”. The Pledgor and Party C shall enter into asupplemental equity pledge agreement with the Pledgee immediately after the Pledgor acquires the AdditionalEquity, shall procure the board of directors and the shareholders’ meeting of Party C to approve the supplementalequity pledge agreement, and shall provide the Pledgee with all documents required by the supplemental equitypledge agreement, including but not limited to : (a) the original shareholder’s contribution certificate concerningthe Additional Equity issued by Party C; and (b) the copy of the capital verification report concerning theAdditional Equity issued by a Chinese certified public accountant. The Pledgor and Party C shall complete theregistration on creation of pledge over the Additional Equity according to Clause 3.1 hereof.6.8Unless the Pledgee gives contrary instructions in advance, each Pledgor and/or Party C agree that if the Pledgortransfers any Equity to any third party (“Equity Transferee”) in whole or in part in violation of this Contract(including separation and succession), the Pledgor and/or Party C shall procure the Equity Transferee torecognize the Pledge unconditionally, and shall complete necessary formalities on change of registration(including but not limited to execution of relevant documents) to ensure the Pledge continues to exist.6.9If the Pledgee provides any loan to Party C, the Pledgors and/or Party C agree to create a pledge over the Equityin favor of the Pledgee to secure repayment of the loan, and to complete relevant formalities promptly accordingto laws, regulations or local practices (if any), including but not limited to execution of relevant documents andcompletion of registration on creation or change of pledge.Party C further warrants and consents as follows:6.10If the execution and performance hereof and the equity pledge hereunder require any third party’s consent,permission, waiver or authorization, or any approval, permission, exemption of or any registration or filing withany government authority (if required by law), Party C shall use it best efforts to assist to obtain the same andmaintain the same fully effective during the term of this Contract.6.11Party C shall not assist or permit the Pledgors to create any new pledge or other security interest over the Equity,nor assist or permit the Pledgors to transfer the Equity without prior written consent of the Pledgee. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 9 of 53 96.12Party C agrees to strict comply with, together with the Pledgors, the obligations under Clauses 6.7, 6.7 and 6.9hereof.6.13Party C shall not transfer its assets or create or permit existence of any security interest or other encumbrancesover its assets which may affect the Pledgee’s rights or interests in the Equity (including but not limited to transferof Party C’s intellectual property or transfer of any Party C’s asset with a value of RMB 500000 or more outside thenormal course of business, or any encumbrances over the property or use right to such assets), without priorwritten consent of the Pledgee.6.14When any lawsuit, arbitration or other claim occurs, which may have adverse effect on Party C, the Equity or thePledgee’s interest under the Control Agreements, Party C undertakes to give prompt written notice to the Pledgeeas soon as possible, and to take all necessary measures at the reasonable request of the Pledgee to ensure thePledgee’s pledge interest over the Equity.6.15Party C shall not take or permit any acts or conducts that may have adverse effect on the Pledgee’s interest or theEquity under the Control Agreements.6.16Party C shall provide the Pledgee with its financial statements for the previous calendar quarter in the first monthof every calendar quarter, including but not limited to the balance sheet, the income statement and the cash flowstatement, and shall provide the Pledgee with the audited financial statements of the previous year within five (5)working days after issuance of such audited financial statements.6.17Party C undertakes to take, at the reasonable request of the Pledgee, all necessary measures and to execute allnecessary documents, to ensure the pledge interest of the Pledgee over the Equity and the exercise and realizationof such interest.6.18If the exercise of the Pledge hereunder causes any transfer of the Equity, Party C undertakes to take all measuresto complete such transfer.6.19At the request of the Pledgee, Party C shall complete the registration of renewal of its business term three (3)months before expiration of its business term, to ensure the validity of this Contract continues.7.Breach Events7.1The following circumstances shall be deemed breach events:7.1.1Party C or any Pledgor breaches any obligation under the Transaction Documents;7.1.2Any representation or warranty made by any Pledgor in Clause 5 hereof contains materialmisrepresentation or omission, and/or the Pledgor breaches any warranties in Clause 5 hereof; Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 10 of 53 107.1.3The Pledgors and Party C fail to complete any registration of the Equity Pledge with the RegistrationAuthority according to Clause 3.1 hereof.7.1.4The Pledgors or Party C breaches any provisions hereof;7.1.5Unless specifically stipulated in Clause 6.1.1, any Pledgor transfers or intends to transfer or waives thepledged Equity, or assigns the pledged Equity without written consent of the Pledgee;7.1.6Any loan, undertaking, compensation, covenant or other debt owed by any Pledgors to any third party (1)is requested to be repaid or performed early owing to the Pledgor’s breach of contract; or (2) has been duebut is unable to be repaid or performed, which results in adverse effect upon the Pledgor’s ability toperform the obligations hereunder;7.1.7Any approval, license, permit or authority that makes this Contract enforceable, legal and valid iscancelled, suspended, void or materially modified;7.1.8Promulgation of any applicable laws causes this Contract illegal or the Pledgor unable to perform theobligations hereunder;7.1.9Any adverse change occurs to any assets of any Pledgor, which, the Pledgee believes, affects the Pledgor’sability to perform obligations hereunder;7.1.10The successors or trustees of Party C and the Pledgors can only perform any obligation under theTransaction Documents in part, or refuse to perform any obligation under the Transaction Documents; and7.1.11The Pledgee is unable or may be unable to exercise any right to the Pledge.7.2The Pledgors shall give written notice to the Pledgee immediately when they know or find any circumstance setforth in Clause 7.1 or any event that may cause such circumstances.7.3Unless the Breach Events set forth in Clause 7.1 have been corrected to the satisfaction of the Pledgee, the Pledgeemay send a Breach Notice to Party C and the Pledgor when or after the Breach Event occurs, requesting thePledgor and Party C to immediately perform obligations under the Transaction Documents, and/or dispose of thePledge according to Clause 8 hereof.8.Enforcement of the Pledge8.1Before the obligations under the Transaction Documents are fully performed, the Pledgors shall not transfer theirEquity in Party C without written consent Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 11 of 53 11of the Pledgee.8.2The Pledgee may send a Breach Notice to the Pledgors when it exercises the Pledge.8.3Subject to the provisions of Clause 7.3 hereof, the Pledgee may enforce any rights to the Pledge when or after itsends the Breach Notice according to Clause 7.2 hereof.8.4The Pledgee is entitled to first payment from the proceeds of transfer, auction or sale of the pledged Equityhereunder in whole or in part according to the legal procedures, until the obligations under the TransactionDocuments are fully performed by Party C and the Pledgors.8.5When the Pledgee disposes of the Pledge according to this Contract, the Pledgors and Party C shall providenecessary assistance to enable the Pledgee to enforce the Pledge according to this Contract.8.6The Pledgors shall assume all expenses, taxes and legal costs with respect to creation of the Pledge and realizationof the Pledgee’s rights hereunder, except for those to be assumed by the Pledgee or Party C according to law orthe agreement between the Parties.8.7The Parties acknowledge that each founding shareholder (i.e., Wu Tianhua, Yang Ke and Dong Ming) and Party Cshall be jointly and severally liable for any breach of any provisions hereof, and shall not be jointly and severallyliable for any breach of this Contract by other shareholders than the founding shareholders and the employeeshareholding platform (“Investor Shareholders”) (unless any founding shareholder provides assistance to anytransfer or other disposal of the Equity by any Investor Shareholder in violation of this Contract, and fails tonotify the Pledgee to take corresponding measures or to obtain consent of Party A, in which case the foundingshareholder shall assume joint and several liability with the Investor Shareholder for the latter’s breach). EachInvestor Shareholder shall be severally liable for any breach under the Transaction Documents attributable toitself, and shall not assume any joint and several liability for any breach by the other Parties hereto. Withoutlimiting the generality of the above provisions, notwithstanding any contrary provisions hereof, the Pledgee shallexercise the Pledge against all Pledgors in proportion to their respective shareholding percentages, unless theexercise of the Pledge is resulting from any Pledgor’s breach of any representations, warranties or covenantsunder the Transaction Documents, in which case the Pledgee has the right to first exercise the Pledge against theEquity held by the above Pledgor.9.Transfer9.1No Pledgor may transfer or delegate any rights or obligations hereunder without prior written consent of thePledgee. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 12 of 53 129.2This Contract shall bind each Pledgor and its/his successors and permitted assigns, and inure to the benefit of thePledgee and its successors and assigns. When the Pledgee deems necessary, the Pledgors shall procure theirrespective successors and permitted assigns to execute necessary documents to ensure that they are bound by thisContract.9.3The Pledgee may transfer any and all of its rights and obligations under the Transaction Documents to any persondesignated by it (whether natural person or legal person) by giving notice to the Pledgors at any time. In suchcase, the transferee shall enjoy and assume the rights and obligations hereunder, as if it is an original party to thisContract. When the Pledgee transfers any rights and obligations under the Transaction Documents, the Pledgorsshall execute relevant agreement or other documents relating to the transfer at the request of the Pledgee.9.4If the Pledgee is to be changed due to any transfer, at the request of the Pledgee, the Pledgor shall enter into a newpledge contract of the same terms and conditions as those of this Contract with the new pledgee.9.5The Pledgors shall strictly comply with this Contract and any other contracts entered into by the Parties hereto orany Party jointly or severally, including the Exclusive Option Contract and the Power of Attorney issued in favorof the Pledgee, shall perform the obligations under this Contract and other contracts, and shall not take any acts oromissions that may affect the validity or enforceability hereof or thereof. Unless as instructed by the Pledgee inwriting, the Pledgors shall not exercise any residual rights to the pledged Equity hereunder.10.TerminationWhen all obligations of Party C and the Pledgors under the Transaction Documents are terminated, this Contractshall terminate, and the Pledgee shall terminate this Contract as soon as reasonably and practicably possible.Unless the laws provide otherwise, the Pledgors or Party C has no right to terminate or rescind this Contract inany case without written consent of the Pledgee.11.Formality Charges and Other CostsParty C shall assume all costs and expenses relating to this Contract, including but not limited to attorney’s fee,cost of production, stamp duty and other taxes and duties. If the Pledgee is required to assume certain taxes andduties according to applicable law, the Pledgors shall procure Party C to fully refund the taxes and duties alreadypaid by the Pledgee.12.Confidentiality ObligationThe Parties acknowledge that any oral or written information exchanged between them with respect to thisContract are confidential information. Each Party shall keep such information confidential, and shall notdisclosure such Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 13 of 53 13information to any third party without written consent of the other Parties, except for any information (a) knownto the public (not through disclosure by the receiving Party); (b) the disclosure of which is required by applicablelaws or any rules or regulations of any stock exchange; or (c) required by any transaction contemplated herein tobe disclosed to either Party’s legal or financial consultant who shall be bound by any confidentiality obligationssimilar to those under this Clause 12. Any disclosure by any personnel or organization employed by either Partyshall be deemed disclosure by suchParty, and such Party shall be liable for breach by the personnel or organization of this Contract. This Clause 12shall survive termination of this Contract for whatever reasons.13.Applicable Law and Dispute Resolution13.1The execution, validity, interpretation and performance hereof, and the resolution of any dispute hereunder shallbe governed by the officially promulgated and publicly available laws of China. Any matter not covered by theofficially promulgated and publicly available laws of China shall be governed by the international legal principlesand conventions.13.2If any dispute arises out of interpretation or performance of this Contract, the Parties shall consult to resolve suchdispute in good faith. If the Parties fail to reach an agreement on resolution of the dispute within 30 days aftereither Party proposes consultation, either Party may refer the dispute to China International Economic and TradeArbitration Commission for arbitration according to the current arbitration rules of the Commission. Thearbitration shall be conducted in Beijing in Chinese. The arbitration award shall be conclusive and bind theParties.13.3Where any dispute arises out of interpretation or performance hereof, or when any dispute is under arbitration,except for the disputed matters, the Parties shall continue to exercise their respective rights and perform theirrespective obligations hereunder.14.Notification14.1All notices and other communications required or permitted by this Contract shall be sent to the designatedaddress of each Party by personal delivery, postage-prepaid registered mail, commercial courier service or fax. Aconfirmation shall be sent by email for each notice. The notice shall be deemed given：14.1.1When it is delivered or refused at the designated receiving address, in case of personal delivery, courierservice or postage-prepaid registered mail.14.1.2On the date when it is successfully transmitted evidenced by the transmission confirmation generatedautomatically, in case of fax.15.Severability Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 14 of 53 14If any or several provisions hereof are decided void, illegal or unenforceable in any respect according to any lawsor regulations, the validity, legality or enforceability of the remaining provisions hereof shall not be affected orimpaired in any respect. The Parties shall consult in good faith to replace such void, illegal or unenforceableprovisions with valid provisions to the maximum extent permitted by laws and expected by the Parties, so thatthe valid provisions have as much similar economic effect to that of those void, illegal or unenforceable aspossible.16.ExhibitsThe exhibits attached hereto constitute an integral part of this Contract.17.Effectiveness17.1This Contract shall become effective when the Parties sign it. Any amendment to, modification of or supplementto this Contract shall be made in writing, and become effective when the Parties sign or seal. The Partiesspecifically agree that the signed electronic copies in PDF format exchanged by the Parties via email shall bedeemed originals, and can serve as evidence of formation of this Agreement.17.2This Agreement is written in Chinese. It is made in thirty (30) counterparts, with each Party holding onecounterpart, and the remaining counterparts kept on file by Beijing Xiangshang Rongke Technology andDevelopment Co., Ltd All counterparts have equal legal force.The remainder of this page is intentionally left blank. Signature page follows. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 15 of 53 Signature Page of the Equity Pledge ContractIn witness whereof, the Parties have caused this equity pledge contract to be signed by their authorized representativeson the date first written above.Beijing Xiangshang Rongke Technology and Development Co., Ltd (seal)Legal representative: Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 16 of 53 Signature Page of the Equity Pledge ContractIn witness whereof, the Parties have caused this equity pledge contract to be signed by their authorized representativeson the date first written above.Signature:Name:Wu Tianhua Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 17 of 53 Signature Page of the Equity Pledge ContractIn witness whereof, the Parties have caused this equity pledge contract to be signed by their authorized representativeson the date first written above.Signature:Name:Yang Ke Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 18 of 53 Signature Page of the Equity Pledge ContractIn witness whereof, the Parties have caused this equity pledge contract to be signed by their authorized representativeson the date first written above.Signature:Name:Dong Ming Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 19 of 53 Signature Page of the Equity Pledge ContractIn witness whereof, the Parties have caused this equity pledge contract to be signed by their authorized representativeson the date first written above.Signature:Name:Sun Yang Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 20 of 53 Signature Page of the Equity Pledge ContractIn witness whereof, the Parties have caused this equity pledge contract to be signed by their authorized representativeson the date first written above.Signature:Name:Lin Xueping Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 21 of 53 Signature Page of the Equity Pledge ContractIn witness whereof, the Parties have caused this equity pledge contract to be signed by their authorized representativeson the date first written above.Beijing Haozhong Management Consulting Center (Limited Partnership) (seal)Authorized representative: Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 22 of 53 Signature Page of the Equity Pledge ContractIn witness whereof, the Parties have caused this equity pledge contract to be signed by their authorized representativeson the date first written above.Xiaochang Shuimu Investment Center (Limited Partnership) (seal)Authorized representative: Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 23 of 53 Signature Page of the Equity Pledge ContractIn witness whereof, the Parties have caused this equity pledge contract to be signed by their authorized representativeson the date first written above.Beijing Oumu Lianghe Investment Management Co., Ltd. (seal)Authorized representative: Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 24 of 53 Signature Page of the Equity Pledge ContractIn witness whereof, the Parties have caused this equity pledge contract to be signed by their authorized representativeson the date first written above.Beijing Ganquan Huizhi Assets Management Co., Ltd. (seal)Authorized representative: Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 25 of 53 Signature Page of the Equity Pledge ContractIn witness whereof, the Parties have caused this equity pledge contract to be signed by their authorized representativeson the date first written above.Tianjin Ronghui Hetou Enterprise Management Partnership (Limited Partnership) (seal)Authorized representative: Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 26 of 53 Signature Page of the Equity Pledge ContractIn witness whereof, the Parties have caused this equity pledge contract to be signed by their authorized representativeson the date first written above.Beijing Tiaozhanzhe Technology Co., Ltd. (seal)Authorized representative: Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 27 of 53 Signature Page of the Equity Pledge ContractIn witness whereof, the Parties have caused this equity pledge contract to be signed by their authorized representativeson the date first written above.Beijing Qianxian Technology Co., Ltd. (seal)Authorized representative: Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 28 of 53 Signature Page of the Equity Pledge ContractIn witness whereof, the Parties have caused this equity pledge contract to be signed by their authorized representativeson the date first written above.Horgos Tiaozhanzhe Venture Capital Co., Ltd. (seal)Authorized representative: Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 29 of 53 Signature Page of the Equity Pledge ContractIn witness whereof, the Parties have caused this equity pledge contract to be signed by their authorized representativeson the date first written above.Tianjin Zhenge Tianfeng Investment Center (Limited Partnership) (seal)Authorized representative: Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 30 of 53 Signature Page of the Equity Pledge ContractIn witness whereof, the Parties have caused this equity pledge contract to be signed by their authorized representativeson the date first written above.Hangzhou Xianfeng Investment Partnership (Limited Partnership) (seal)Authorized representative: Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 31 of 53 Signature Page of the Equity Pledge ContractIn witness whereof, the Parties have caused this equity pledge contract to be signed by their authorized representativeson the date first written above.Chengdu ChuangrensuoaiTechnology Co., Ltd. (seal)Authorized representative: Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 32 of 53 Signature Page of the Equity Pledge ContractIn witness whereof, the Parties have caused this equity pledge contract to be signed by their authorized representativeson the date first written above.Beijing Pansheng Investment Management Co., Ltd. (seal)Authorized representative: Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 33 of 53 Signature Page of the Equity Pledge ContractIn witness whereof, the Parties have caused this equity pledge contract to be signed by their authorized representativeson the date first written above.Beijing Mosi Investment Co., Ltd. (seal)Authorized representative: Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 34 of 53 Signature Page of the Equity Pledge ContractIn witness whereof, the Parties have caused this equity pledge contract to be signed by their authorized representativeson the date first written above.Tianjin Jinmi Investment Partnership (Limited Partnership) (seal)Authorized representative: Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 35 of 53 Signature Page of the Equity Pledge ContractIn witness whereof, the Parties have caused this equity pledge contract to be signed by their authorized representativeson the date first written above.Beijing Lingfeng Investment Center (Limited Partnership) (seal)Authorized representative: Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 36 of 53 Signature Page of the Equity Pledge ContractIn witness whereof, the Parties have caused this equity pledge contract to be signed by their authorized representativeson the date first written above.Zhenzhi Chengyuan Equity Investment Center of Ningbo Meishan Bonded Port Area (Limited Partnership) (seal)Authorized representative: Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 37 of 53 Signature Page of the Equity Pledge ContractIn witness whereof, the Parties have caused this equity pledge contract to be signed by their authorized representativeson the date first written above.Beijing Huagai Venture Equity Investment Development Partnership (Limited Partnership) (seal)Authorized representative: Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 38 of 53 Signature Page of the Equity Pledge ContractIn witness whereof, the Parties have caused this equity pledge contract to be signed by their authorized representativeson the date first written above.Gongqingcheng Wayne Investment Fund Partnership (Limited Partnership) (seal)Authorized representative: Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 39 of 53 Signature Page of the Equity Pledge ContractIn witness whereof, the Parties have caused this equity pledge contract to be signed by their authorized representativeson the date first written above.Shenzhen Xianfeng Growth Investment Partnership (Limited Partnership) (seal)Authorized representative: Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 40 of 53 Signature Page of the Equity Pledge ContractIn witness whereof, the Parties have caused this equity pledge contract to be signed by their authorized representativeson the date first written above.Gongqingcheng Dianliang Investment Management Partnership (Limited Partnership) (seal)Authorized representative: Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 41 of 53 Signature Page of the Equity Pledge ContractIn witness whereof, the Parties have caused this equity pledge contract to be signed by their authorized representativeson the date first written above.Gongqingcheng Shanglin Investment Management Partnership (Limited Partnership) (seal)Authorized representative: Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 42 of 53 Signature Page of the Equity Pledge ContractIn witness whereof, the Parties have caused this equity pledge contract to be signed by their authorized representativeson the date first written above.Beijing Bohu Xiangshang Technology Co.,LTD. (seal)Legal representative: Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 43 of 53 Exhibit to the Equity Pledge ContractExhibits to the Equity Pledge Contract:1. Register of Shareholders of Beijing Xiangshang Rongke Technology and Development Co., Limited Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 44 of 53 Exhibit to the Equity Pledge ContractExhibit 1Register of Shareholders of Beijing Xiangshang Rongke Technology and Development Co., LtdShareholderID No./ Registration No./Uniform Social Credit CodeCapitalContribution(RMB: tenthousand)ShareholdingPercentageEquity PledgeWu TianhuaXXXXXXXXXXXXXXXXXX214.35524416.8756%Wu Tianhua creates apledge over his entireequity in the Companyin favor of Beijing BohuXiangshang TechnologyCo.,LTD.Yang KeXXXXXXXXXXXXXXXXXX86.7730556.8314%Yang Ke creates apledge over his entireequity in the Companyin favor of Beijing BohuXiangshang TechnologyCo.,LTD.Dong MingXXXXXXXXXXXXXXXXXX4.5879070.3612%Dong Ming creates apledge over his entireequity in the Companyin favor of Beijing BohuXiangshang TechnologyCo.,LTD.Sun YangXXXXXXXXXXXXXXXXXX5.7012200.4488%Sun Yang creates apledge over his entireequity in the Companyin favor of Beijing BohuXiangshang TechnologyCo.,LTD.Lin XuepingXXXXXXXXXXXXXXXXXX13.8313001.0889%Lin Xueping creates apledge over her entireequity in the Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 45 of 53 Exhibit to the Equity Pledge ContractShareholderID No./ Registration No./Uniform Social Credit CodeCapitalContribution(RMB: tenthousand)ShareholdingPercentageEquity PledgeCompany in favor ofBeijing BohuXiangshang TechnologyCo.,LTD.Beijing HaozhongManagementConsulting Center(LimitedPartnership)XXXXXXXXXXXXXXXXXX221.88531217.4684%Beijing HaozhongManagementConsulting Center(Limited Partnership)creates a pledge over itsentire equity in theCompany in favor ofBeijing BohuXiangshang TechnologyCo.,LTD.Xiaochang ShuimuInvestment Center(LimitedPartnership)XXXXXXXXXXXXXXXXXX147.80573911.6363%Xiaochang ShuimuInvestment Center(Limited Partnership)creates a pledge over itsentire equity in theCompany in favor ofBeijing BohuXiangshang TechnologyCo.,LTD.Beijing OumuLianghe InvestmentManagement Co.,Ltd.XXXXXXXXXXXXXXXXXX4.8047950.3783%Beijing Oumu LiangheInvestmentManagement Co., Ltd.creates a pledge over itsentire equity in theCompany in favor ofBeijing BohuXiangshang TechnologyCo.,LTD. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 46 of 53 Exhibit to the Equity Pledge ContractShareholderID No./ Registration No./Uniform Social Credit CodeCapitalContribution(RMB: tenthousand)ShareholdingPercentageEquity PledgeBeijing GanquanHuizhi AssetsManagement Co.,Ltd.XXXXXXXXXXXXXXXXXX2.6885880.2117%Beijing Ganquan HuizhiAssets ManagementCo., Ltd. creates apledge over its entireequity in the Companyin favor of Beijing BohuXiangshang TechnologyCo.,LTD.Tianjin RonghuiHetou EnterpriseManagementPartnership (LimitedPartnership)XXXXXXXXXXXXXXXXXX1.0870120.0856%Tianjin Ronghui Hetou Enterprise Management Partnership (Limited Partnership) creates a pledge over its entire equity in the Company in favor of Beijing Bohu Xiangshang Technology Co.,LTD. Beijing TiaozhanzheTechnology Co., Ltd.XXXXXXXXXXXXXXXXXX9.3670880.7374%Beijing TiaozhanzheTechnology Co., Ltd.creates a pledge over itsentire equity in theCompany in favor ofBeijing BohuXiangshang TechnologyCo.,LTD.Beijing QianxianTechnology Co., Ltd.XXXXXXXXXXXXXXXXXX8.5006320.6692%Beijing QianxianTechnology Co., Ltd.creates a pledge over itsentire equity in theCompany in favor ofBeijing Bohu Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 47 of 53 Exhibit to the Equity Pledge ContractShareholderID No./ Registration No./Uniform Social Credit CodeCapitalContribution(RMB: tenthousand)ShareholdingPercentageEquity PledgeXiangshang TechnologyCo.,LTD.HorgosTiaozhanzheVenture CapitalCo., Ltd.XXXXXXXXXXXXXXXXXX0.8664560.0682%Horgos TiaozhanzheVenture Capital Co.,Ltd. creates a pledgeover its entire equity inthe Company in favor ofBeijing BohuXiangshang TechnologyCo.,LTD.Tianjin ZhengeTianfengInvestment Center(LimitedPartnership)XXXXXXXXXXXXXXXXXX18.7341761.4749%Tianjin Zhenge TianfengInvestment Center(Limited Partnership)creates a pledge over itsentire equity in theCompany in favor ofBeijing BohuXiangshang TechnologyCo.,LTD.HangzhouXianfengInvestmentPartnership(LimitedPartnership)XXXXXXXXXXXXXXXXXX6.7146500.5286%Hangzhou XianfengInvestment Partnership(Limited Partnership)creates a pledge over itsentire equity in theCompany in favor ofBeijing BohuXiangshang TechnologyCo.,LTD.ChengduXXXXXXXXXXXXXXXXXX13.4293001.0572%Chengdu Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 48 of 53 Exhibit to the Equity Pledge ContractShareholderID No./ Registration No./Uniform Social Credit CodeCapitalContribution(RMB: tenthousand)ShareholdingPercentageEquity PledgeChuangrensuoaiTechnology Co.,Ltd.ChuangrensuoaiTechnology Co., Ltd.creates a pledge over itsentire equity in theCompany in favor ofBeijing BohuXiangshang TechnologyCo.,LTD.Beijing PanshengInvestmentManagement Co.,Ltd.XXXXXXXXXXXXXXXXXX24.2864821.9120%Beijing PanshengInvestmentManagement Co., Ltd.creates a pledge over itsentire equity in theCompany in favor ofBeijing BohuXiangshang TechnologyCo.,LTD.Beijing MosiInvestment Co.,Ltd.XXXXXXXXXXXXXXXXXX17.5590311.3824%Beijing Mosi InvestmentCo., Ltd. creates apledge over its entireequity in the Companyin favor of Beijing BohuXiangshang TechnologyCo.,LTD.Tianjin JinmiInvestmentPartnership(LimitedPartnership)XXXXXXXXXXXXXXXXXX186.59750314.6903%Tianjin Jinmi InvestmentPartnership (LimitedPartnership) creates apledge over its entireequity in the Companyin favor of Beijing BohuXiangshang Technology Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 49 of 53 Exhibit to the Equity Pledge ContractShareholderID No./ Registration No./Uniform Social Credit CodeCapitalContribution(RMB: tenthousand)ShareholdingPercentageEquity PledgeCo.,LTD.Beijing LingfengInvestment Center(LimitedPartnership)XXXXXXXXXXXXXXXXXX58.5109144.6064%Beijing LingfengInvestment Center(Limited Partnership)creates a pledge over itsentire equity in theCompany in favor ofBeijing BohuXiangshang TechnologyCo.,LTD.Zhenzhi ChengyuanEquity InvestmentCenter of NingboMeishan BondedPort Area (LimitedPartnership)XXXXXXXXXXXXXXXXXX23.4913631.8494%Zhenzhi ChengyuanEquity InvestmentCenter of NingboMeishan Bonded PortArea (LimitedPartnership) creates apledge over its entireequity in the Companyin favor of Beijing BohuXiangshang TechnologyCo.,LTD.Beijing HuagaiVenture EquityInvestmentDevelopmentPartnership (LimitedPartnership)XXXXXXXXXXXXXXXXXX48.7804883.8403%Beijing Huagai VentureEquity InvestmentDevelopmentPartnership (LimitedPartnership) creates apledge over its entireequity in the Companyin favor of Beijing BohuXiangshang TechnologyCo.,LTD. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 50 of 53 Exhibit to the Equity Pledge ContractShareholderID No./ Registration No./Uniform Social Credit CodeCapitalContribution(RMB: tenthousand)ShareholdingPercentageEquity PledgeGongqingchengWayne InvestmentFund Partnership(LimitedPartnership)XXXXXXXXXXXXXXXXXX49.0853663.8643%Gongqingcheng WayneInvestment FundPartnership (LimitedPartnership) creates apledge over its entireequity in the Companyin favor of Beijing BohuXiangshang TechnologyCo.,LTD.Shenzhen XianfengGrowth InvestmentPartnership (LimitedPartnership)XXXXXXXXXXXXXXXXXX12.1951220.9601%Shenzhen XianfengGrowth InvestmentPartnership (LimitedPartnership) creates apledge over its entireequity in the Companyin favor of Beijing BohuXiangshang TechnologyCo.,LTD.GongqingchengDianliangInvestmentManagementPartnership (LimitedPartnership)XXXXXXXXXXXXXXXXXX36.5853662.8803%GongqingchengDianliang InvestmentManagementPartnership (LimitedPartnership) creates apledge over its entireequity in the Companyin favor of Beijing BohuXiangshang TechnologyCo.,LTD. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 51 of 53 Exhibit to the Equity Pledge ContractShareholderID No./ Registration No./Uniform Social Credit CodeCapitalContribution(RMB: tenthousand)ShareholdingPercentageEquity PledgeGongqingchengShanglin InvestmentManagementPartnership (LimitedPartnership)XXXXXXXXXXXXXXXXXX51.9868044.0928%GongqingchengShanglin InvestmentManagementPartnership (LimitedPartnership) creates apledge over its entireequity in the Companyin favor of Beijing BohuXiangshang TechnologyCo.,LTD.Total——1270.210913100%——The remainder of this page is intentionally left blank. Signature page follows. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 52 of 53 Signature Page of the Register of Shareholders(Signature Page of the Register of Shareholders of Beijing Xiangshang Rongke Technology and Development Co.,Ltd)Company: Beijing Xiangshang RongkeTechnology and Development Co., Ltd (seal)By:Name:Wu TianhuaTitle:Legal RepresentativeDate: Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex4d3.htm Type: EX-4.3 Pg: 53 of 53 Confirmation and Signature Page of the Register of Shareholders(Confirmation and Signature Page of the Register of Shareholders of Beijing Xiangshang Rongke Technology andDevelopment Co., Ltd) Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex8d1.htm Type: EX-8.1 Pg: 1 of 4 1 / 4Exhibit 8.1LIST OF SIGNIFICANT SUBSIDIARIES AND PRINCIPAL CONSOLIDATED AFFILIATED ENTITIES*UP Fintech Holding Limited (the “Company”) was incorporated under the laws of Cayman Islands on January 26, 2018. The Company, itssubsidiaries, its consolidated variable interest entities (“VIEs”) and VIEs’ subsidiaries (collectively, the “Group”) are primarily engaged inproviding online brokerage services.As of December 31, 2020, details of the Group’s subsidiaries, VIEs and VIEs’ subsidiaries were as follows: Place of establishment/ incorporationSubsidiaries:Up Fintech Global Holdings Limited (“Up Fintech Global”)British Virgin Islands (“BVI”)JV Uptech Holding limited (“JV”)BVIKastle Limited (“Kastle”)Hong Kong, ChinaTung Chi Consulting Limited (“Tung Chi”)Hong Kong, ChinaTiger Fintech Holdings Inc.(“Tiger Fintech”)United States of America (“USA”)US Tiger Securities, Inc. (“US Tiger Securities”)USAUS Tiger (Hong Kong) Limited1(“US Tiger (Hong Kong)”)Hong Kong, ChinaMarsco Investment Corporation (“Marsco”)USATrading Front Inc.(“TradingFront”)USAWealthn LLC (“Wealthn”)USATradeup Inc. (“Tradeup”)USAXiangshang Upfintech Holding Limited (“Xiangshang Upfintech Holding”)BVITiger Fintech (Singapore) PTE.LTD.(“Tiger Fintech (Singapore)”)SingaporeTiger Brokers (Singapore) PTE Ltd. (“Tiger Brokers SG”)SingaporeAmtiger Consultants Private Limited (“Amtiger”)IndiaTiger Brokers (NZ) Limited (“TBNZ”)New ZealandFleming Funds Management Pty Limited (“Fleming”)AustraliaTiger Brokers (AU) Pty Limited (“TBAU”)AustraliaTiger Investor Services Pty Limited (“Tiger Investor”)AustraliaUptech Global Holding Limited (“Uptech Holding”)BVII-Tiger Global Investment Management Limited (“I-Tiger Global InvestmentManagement”)Cayman Islands (“Cayman”)I-Tiger Global Investment SPC (“I-Tiger Global Investment Investment”)CaymanProsperous Investment Management Limited (“Prosperous”)CaymanTiger Fixed Income Portfolio Limited (“Tiger Fixed Income”)Cayman1a new Hong Kong incorporated limited technology company as the wholly owned subsidiary on July 8, 2020. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex8d1.htm Type: EX-8.1 Pg: 2 of 4 2 / 4U-Tiger SPC(“U-Tiger”)CaymanUp Fintech International Limited (“Up Fintech”)Hong Kong,ChinaBeijing Bohu Xiangshang Technology Co., Ltd (“Beijing Bohu”, “BeijingWFOE I”)2The People’s Republic of China(“PRC)Beijing Xiangshangyixin Technology Co., Ltd (“Beijing Yixin”, “BeijingWFOE II”)PRCHangzhou U-Tiger Technology Co.,LTD3 (“Hangzhou U-Tiger”)PRC2formerly known as “Ningxia Xiangshang Yixin Technology Co. Ltd, relocation and name change were completed on December 22,20203a new PRC incorporated limited technology company as the 85% subsidiary on April 9,2020. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex8d1.htm Type: EX-8.1 Pg: 3 of 4 3 / 4ORGANIZATION AND PRINCIPAL ACTIVITIES (Continued) Place of establishment/ incorporationSubsidiaries:VIEs:Ningxia Xiangshang Rongke Technology Development Co.,LTD (“Ningxia Rongke”,“Ningxia VIE I”)PRCBeijing Xiangshang Yiyi Laohu Technology Group Co.,LTD (“Beijing Yiyi”, “BeijingVIE II”)PRCVIEs’ subsidiaries:Beijing Zhijianfengyi Information Technology Co., Ltd (“Beijing ZJFY”)PRCBeijing Huyi Technology Co., Ltd (“Huyi”)PRCBeijing U-Tiger Network Technology Co., LTD. (“Beijing U-Tiger Network”)PRCBeijing Xiaolaohu Wealth Investment Management Co., LTD4 (“Beijing XiaolaohuWealth Investment”)PRCBeijing Chenhao Technology Co., LTD. (“Beijing Chenhao”)PRCTiger Technology Corporation Limited (“Tiger Technology”)Hong Kong, ChinaTiger Brokers International Limited (“TB International”)Hong Kong, ChinaTiger Brokers Group Limited (“TB Group”)Hong Kong, ChinaTiger Assets Management Corporation Limited (“Tiger Asset Management”)Hong Kong, ChinaBeijing U-Tiger Business Service Co., Ltd (“Beijing U-Tiger Business”)PRCShenzhen Xiang Shang Hu Xun Technology Co., LTD. (“Hu Xun”)PRCShenzhen Huichuang Tianrong Asset Management Co.,Ltd. (“Huichuang Tianrong”)PRCGuangzhou U-Tiger Technology Co.,LTD (“Guangzhou U-Tiger”)PRCFangguang Technology (Ningxia) Co.,LTD (“Fangguang Technology”)PRCTiger Financial Information Service (Ningxia) Co.,LTD5PRCYunxin (Beijing) Information Consulting Co.,LTD6PRC4a PRC company acquired on December 17, 2020 for the purpose of internet service incorporated in PRC on August 17, 2015.5established on September 9, 2016 is a technology company which focuses on technology service incorporated in PRC, it has been de-registered on November 16, 2020.6established on August 16, 2013, is a technology company which focuses on technology service incorporated in PRC, it has been de-registeredon October 27, 2020. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex8d1.htm Type: EX-8.1 Pg: 4 of 4 4 / 4Beijing Beihu Commercial Service Co.,LTD7PRCLaohu Rongke Technology Co.,LTD8PRCXinhu Information Technology (Shanghai) Co.,LTD9PRC*Other entities of UP Fintech Holding Limited have been omitted from this list since, considered in the aggregate as a single entity, theywould not constitute a significant subsidiary.7established on August 10, 2018, is a technology company which focuses on technology service incorporated in PRC, it has been de-registeredon December 17, 2020.8established on November 9, 2016, is a technology company which focuses on technology service incorporated in PRC, it has been de-registered on November 17, 2020.9established on July 5,2017 ,is a technology company which focuses on technology service incorporated in PRC, it has been de-registered onNovember 12, 2020. Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex12d1.htm Type: EX-12.1 Pg: 1 of 1 Exhibit 12.1CERTIFICATION BY THE PRINCIPAL EXECUTIVE OFFICERPURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002I, Tianhua Wu, certify that:1. I have reviewed this annual report on Form 20-F of UP FINTECH HOLDING LIMITED.;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to makethe statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered bythis report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respectsthe financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;4. The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) for the company and have(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us byothers within those entities, particularly during the period in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered bythe annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financialreporting; and5. The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, tothe company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internalcontrol over financial reporting.Date: April 27, 2021By:/s/ Tianhua WuName: Tianhua WuTitle: Chief Executive Officer Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex12d2.htm Type: EX-12.2 Pg: 1 of 1 Exhibit 12.2CERTIFICATION BY THE PRINCIPAL FINANCIAL OFFICERPURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002I, John Fei Zeng, certify that:1. I have reviewed this annual report on Form 20-F of UP FINTECH HOLDING LIMITED;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to makethe statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered bythis report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respectsthe financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;4. The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) for the company and have:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us byothers within those entities, particularly during the period in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered bythe annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financialreporting; and5. The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, tothe company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internalcontrol over financial reporting.Date: April 27, 2021By:/s/ John Fei ZengName: John Fei ZengTitle: Chief Financial Officer Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex13d1.htm Type: EX-13.1 Pg: 1 of 1 Exhibit 13.1CERTIFICATION BY THE PRINCIPAL EXECUTIVE OFFICERPURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report of UP FINTECH HOLDING LIMITED (the “Company”) on Form 20-F for the year endedDecember 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Tianhua Wu, Chief ExecutiveOfficer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that tomy knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of theCompany.Date: April 27, 2021By:/s/ Tianhua WuName: Tianhua WuTitle: Chief Executive Officer Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex13d2.htm Type: EX-13.2 Pg: 1 of 1 Exhibit 13.2CERTIFICATION BY THE PRINCIPAL FINANCIAL OFFICERPURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report of UP FINTECH HOLDING LIMITED (the “Company”) on Form 20-F for the year endedDecember 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John Fei Zeng, Chief FinancialOfficer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that tomy knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of theCompany.Date: April 27, 2021By:/s/ John Fei ZengName: John Fei ZengTitle: Chief Financial Officer Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex15d1.htm Type: EX-15.1 Pg: 1 of 1 Exhibit 15.1Consent of Independent Registered Public Accounting FirmThe Board of DirectorsUP Fintech Holding Limited:We consent to the incorporation by reference in the registration statement (No. 333-231894) on Form S-8 of UP Fintech Holding Limited and itssubsidiaries of our report dated April 27, 2021, with respect to the consolidated balance sheet of UP Fintech Holding Limited and its subsidiaries asof December 31, 2020, and the related consolidated statements of comprehensive income (loss), changes in equity (deficit), and cash flows for theyear ended December 31, 2020 and the related notes, which report appears in the December 31, 2020 annual report on Form 20-F of UP FintechHolding Limited./s/ KPMG Huazhen LLPBeijing, ChinaApril 27, 2021 Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex15d2.htm Type: EX-15.2 Pg: 1 of 1 Exhibit 15.2REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe consent to the incorporation by reference in Registration Statement No. 333-231894 on Form S-8 of our report dated April 29, 2020,relating to the financial statements of UP Fintech Holding Limited, appearing in this Annual Report on Form 20-F for the year ended December 31,2020./s/ Deloitte Touche Tohmatsu Certified Public Accountants LLPDeloitte Touche Tohmatsu Certified Public Accountants LLPBeijing, the People’s Republic of ChinaApril 27, 2021 Date: 04/27/2021 04:54 AMToppan MerrillProject: 21-3512-1 Form Type: 20-F Client: 21-3512-1_UP FINTECH HOLDING LTD_20-F File: tigr-20201231xex15d3.htm Type: EX-15.3 Pg: 1 of 1 Exhibit 15.3April 27, 2021Securities and Exchange Commission100 F Street, N.E.Washington, D.C. 20549-7561Dear Sirs/Madams:We have read Item 16F of Form 20-F of UP Fintech Holding Limited for the year ended December 31, 2020, dated April 27, 2021, and have thefollowing comments:1.We agree with the statements made in paragraph 2 and 3 of Item 16F, for which we have a basis on which to comment on, and we agreewith, the disclosures.2.We have no basis on which to agree or disagree with the statements made in paragraph 1 and in paragraph 4 of Item 16F.Yours truly,/s/ Deloitte Touche Tohmatsu Certified Public Accountants LLPDeloitte Touche Tohmatsu Certified Public Accountants LLPBeijing, the People’s Republic of China

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