The Hong Kong Monetary Authority (HKMA) has introduced new measures requiring banks to more strictly monitor and manage accounts of clients from China, in line with China's plan to curb capital outflow.
June 6, 2569 at 11.01:XNUMX a.m. Bloomberg News reported that Hong Kong Financial Management Authority (HKMA)) revealed that it has begun implementing new regulatory guidelines for banks, similar to the requirements recently applied to securities firms, to tighten controls on opening and managing accounts for clients from mainland China.
The HKMA stated that the measures aim to ensure the account opening process is conducted in a regulated and orderly manner. Currently, the system is operating smoothly, even though applications from customers in mainland China continue to be submitted.
The tightening of scrutiny of Chinese customers is part of a broader effort by the Beijing government to stem capital outflows following a crackdown on illegal cross-border investment. This comes amid data from the Institute of the International Finance (IIF) estimating that capital outflows from China reached a record high of approximately $807,000 billion last year.
Previously, the China Securities Regulatory Commission (CSRC) fined three major online securities brokerage firms a total of over $330 million for providing unauthorized foreign securities trading services to clients in mainland China. The CSRC also ordered that all non-compliant retail client accounts be closed within two years.
The HKMA further stated that Hong Kong's regulatory authorities have been closely coordinating with mainland Chinese regulators and believe that this new measure will strengthen Hong Kong's role as an international financial center.
Last month, the HKMA issued a five-page circular requiring banks to close investment accounts opened using questionable or forged documents, and requiring investors from mainland China to sign a written certification regarding their investment status and purpose.
However, these measures have raised concerns among financial institutions in Hong Kong, particularly banks and insurance companies that rely heavily on customers from mainland China, as the market believes that such tightening could impact future business growth.
These concerns are reflected in the share prices of major financial companies with a customer base in China. Shares of HSBC, AIA Group, and other financial companies with business links to China have fallen over the past week, as investors assess that new capital controls could impact the revenue and business expansion of Hong Kong's financial sector.
refer : bloomberg.com
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