Hong Kong banks reportedly require clients from mainland China who want to open new investment accounts to sign a declaration confirming the lawful source of funds, after Beijing launched a crackdown on cross-border investment, mainland media reported.
The declaration requires that the account holder confirm that all funds that support the investment activities and related settlements are from lawful sources outside of the Chinese mainland.
The investment account services are only available to Chinese mainland investors located in Hong Kong, like residing or working, the report said, adding that investment trading functions will be suspended for existing clients until the re-signing is completed.
The declaration also showed that the bank can ask clients to offer relevant proof documents to comply with Hong Kong's regulatory requirements. If the clients fail to provide, the bank may refuse to offer related services, and existing services may also be terminated.
Hong Kong's largest lender HSBC (0005) has asked mainland clients seeking to open investment accounts to sign a declaration confirming their funds come from overseas rather than China, two of the sources said.
Smaller affiliate Hang Seng Bank has issued a similar form to mainland clients, a separate source said.
Bank of China Hong Kong (2388) from this week has also begun asking clients to clarify the source of funds when opening investment accounts, two other sources said.
HSBC, Hang Seng and BOC HK did not immediately respond to requests for comment.
The moves show the broader impact of Beijing's crackdown, which extends beyond the brokerage industry.
In a circular published the same day, the Hong Kong Monetary Authority asked licensed banks to tighten controls on new trading account openings.
A spokesperson for Hong Kong Association of Banks said the tightened requirements for investment accounts on mainland clients "will have no significant impact on the account opening process".
The banking industry will conduct reviews in accordance with the latest regulatory guidelines, the spokesperson said in a statement.
Previously, mainland residents often moved capital offshore via unofficial channels and opened accounts with local lenders, despite Beijing's strict capital controls.
The three banks are among the most popular overseas lenders for mainland visitors opening accounts when travelling across the border.
Staff reporter and Reuters
