Hong Kong’s banking regulator just made it harder for mainland Chinese investors to open and maintain investment accounts in the city. The Hong Kong Monetary Authority confirmed on June 6 that new guidelines are now in effect, requiring banks to tighten controls around how they onboard and manage these customers.
The rules follow a circular the HKMA issued on May 22, and they bring banking standards in line with the stricter requirements already imposed by Hong Kong’s Securities and Futures Commission on licensed brokerages.
What the new rules actually require
The HKMA’s guidelines hit several pressure points at once. First, investors must now provide written declarations affirming that their funds come from lawful sources outside mainland China. That’s a notable requirement given China’s strict capital controls, which limit individuals to moving $50K per year out of the country.
Second, banks are required to shut down accounts that were opened using questionable or forged documents. Dormant investment accounts carrying zero balances also get the axe.
