The Hong Kong Securities and Futures Commission has enhanced measures to address the risk of forged documents and money laundering, and raised account opening standards.

The Securities and Futures Commission of Hong Kong issued a circular today, outlining the monitoring measures to be implemented when opening accounts and maintaining customer relationships. This circular was issued after the Commission inspected the account opening procedures of 12 securities brokerages. The inspection identified several significant deficiencies, including insufficient due diligence on account opening documents, accepting suspicious or forged documents during the account opening process, and weaknesses in managing cross-border agency relationships with overseas intermediaries. The Commission is concerned about the potential improper use of client accounts for suspicious or illegal transactions, which could exacerbate money laundering and terrorist financing risks. The Commission is requiring all licensed corporations to conduct internal checks as soon as possible to detect whether any suspicious or forged documents have been accepted for opening accounts. The Commission also lists additional measures for licensed corporations in opening and managing accounts for mainland investors. These additional measures include closing investment accounts opened with suspicious or forged documents, closing zero-balance inactive investment accounts, and requiring written declarations from investors when opening new investment accounts, as well as ensuring that settlements and fund deposits can only be made through bank accounts held in the client's name at eligible banks.