Svmuu News The Hong Kong Securities and Futures Commission (SFC) today issued a circular outlining the monitoring measures that should be implemented when opening accounts and maintaining client relationships. The circular was issued following the SFC's review of the account opening practices of 12 brokerage firms. The review identified a number of significant deficiencies, including inadequate due diligence on account opening documents, acceptance of suspicious or forged documents during the account opening process, and weaknesses in managing cross-border agency relationships with overseas intermediaries.
The SFC is deeply concerned about the potential for client accounts to be misused for suspicious or illegal transactions, thereby increasing the risks of money laundering and terrorist financing. The SFC requires all licensed corporations to conduct internal checks as soon as practicable to detect whether any suspicious or forged documents have been accepted for opening accounts.
The SFC also outlined additional measures for licensed corporations in opening and managing accounts for mainland Chinese investors. These additional measures include closing investment accounts opened with suspicious or forged documents, closing dormant investment accounts with zero balances, and, when opening new investment accounts, obtaining a written declaration from the investor and requiring that settlements and fund withdrawals can only be conducted through bank accounts held in the client's own name at qualified banks. (Jin Shi)