Detailed interpretation of the Hong Kong Monetary Authority's mainland investment account document — Is your Hong Kong account under the "crackdown" scope?

In the past week, discussions have mostly revolved around the China Securities Regulatory Commission event, and today the document from the Hong Kong Monetary Authority is also within expectations. The main content of this document is actually a "patch" for the previous issues related to Tiger, Futu, and Changqiao.

These three companies are merely the "early birds" targeted by the crackdown, but it does not mean that other Hong Kong brokerages or banks can conduct investment business for mainland Chinese residents in US stocks or Hong Kong stocks. I previously wrote a post discussing whether "trading US stocks or Hong Kong stocks on ZA Bank by Chinese users is compliant?" and now I can continue this topic.

Address: https://x.com/PhyrexNi/status/2057866808959578489?s=20

This time, the Hong Kong Monetary Authority is targeting almost all investment accounts opened for users from mainland China. Both banks and brokerages are on the list of targets; of course, if it is just for deposits, that is fine, but if it involves investment, it falls under this crackdown.

Among these, the two most important points are:

1. The account holder must confirm that all funds used to support investment activities and related settlements come from legal sources outside of mainland China.

2. Investment account services are only applicable to investors residing in Hong Kong (e.g., living or working in Hong Kong) and they must ensure that the funding source is legal and compliant.

These two points are parallel to each other and not just one must be satisfied; that is to say, it must be ensured that the funds for investment in Hong Kong banks or brokerages all come from outside mainland China, and it is also necessary to live in Hong Kong.

In simple terms, if you usually live in mainland China and do not work or live in Hong Kong, then even if your investment funds come from outside China, you are still within the scope of this crackdown.

I have seen on X that a large portion of those trading stocks or participating in IPOs at Hong Kong banks or brokerages do not meet this standard. So what will happen if one doesn't meet the requirements?

The answer is straightforward: problematic investment accounts will either be closed, suspended, or have trading restricted. Especially, the three types of accounts are most at risk.

First, accounts opened with suspicious materials, packaging materials, or false certifications.

This refers to the address proof or KYC documents — are they all real? If any are found to be fake, then they will definitely be closed. Additionally, it was emphasized that account opening checks will trace back to January 2023, which pertains to this aspect.

This means if your account was opened after January 2023, it is within the review scope, and if it was opened before that, even if there were packaged materials, it will not be processed.

Second, accounts with zero balance, long-term inactivity, and no proactive operations in the past 12 months — these are considered sleeping investment accounts.

This type doesn't need further explanation.

Third, individuals who have been residing in mainland China for a long time, incapable of proving that their investment funds come from legal sources outside of mainland China, yet still utilize Hong Kong banks or brokerages to buy Hong Kong stocks, US stocks, ETFs, and funds.

The third type is what I am emphasizing, and it is also the one that most people may find hard to meet. The most direct consequence of this is the closure of the investment account; of course, this only affects investment accounts and savings accounts should not be a big issue.

Closing accounts is not about asset confiscation but rather first restricting new transactions, such as not allowing new purchases, not permitting additional deposits, and not continuing investment services, while allowing selling and withdrawals, ultimately clearing out the investment account.

With this document issued, it basically seals off the most accessible route for mainland Chinese users to open savings+investment accounts overseas.

#Bitget has arrived as VIP! Crypto, US stocks, CFDs, global first-mover strategy all in one stop

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。