Mainland Chinese individuals intending to open investment accounts in Hong Kong banks are now required to sign a declaration to prove that their investments are made while physically present in Hong Kong and that the funds originate from outside mainland China. The Hong Kong Monetary Authority has also mandated related checks to trace back to January 2023. This move comes following the China Securities Regulatory Commission’s crackdown on illegal cross-border stock trading, signaling Beijing’s extended scrutiny to traditional banks and other financial institutions.
According to reports from financial outlets, starting on May 26th, mainland investors opening new investment accounts in Hong Kong are being asked by local banks to sign a declaration confirming the legal sources of their funds.
An investor who attempted to open an account at a Chinese-funded bank in Hong Kong stated, “During the account opening process, the bank staff halted the procedure midway and requested the signing of additional documents before restarting the application.”
Two other sources confirmed to Reuters that HSBC, the largest bank in Hong Kong, has begun requiring mainland investors to sign a declaration proving that their funds are sourced from overseas and not from mainland China.
The new document, titled “Cross-Border Disclosure Statement (Applicable to Investment Account Opening),” requires individuals opening investment accounts to confirm that “all funds used to support investment activities and related settlements are from legal sources outside mainland China.” Mainland Chinese residents are reminded that investment account services are only applicable to investors physically present in Hong Kong, such as those residing or working in the city, and they must ensure the legitimacy and compliance of their fund sources.
Furthermore, the document stipulates that to comply with relevant regulatory requirements in Hong Kong, customers may be required to provide supporting documents. Failure to provide these documents may result in the refusal to provide services, with existing services being subject to termination.
An official customer service representative from a Chinese-funded bank mentioned that customers who have already opened accounts can visit branches to sign the new declaration or confirm via email. Upon completing the signing process, trading functions will be restored within a day, with transactions temporarily suspended in the meantime. Accounts will not be closed, and existing holdings and assets will remain unaffected, only new buy transactions will be paused temporarily.
The Hong Kong Monetary Authority informed reporters that these new regulations are part of one of the three additional measures that the Hong Kong Securities and Futures Commission issued to all recognized institutions concerning mainland investment amounts and investment account openings on May 22nd.
The three additional measures include:
1. Closing investment accounts opened using suspicious or forged documents. Identify customers who have used suspicious or forged documents to open investment accounts since January 2023 or any other period specified by the HKMA.
2. Closing zero-balance dormant investment accounts. Investment accounts held by mainland investors with no asset balance as of May 22, 2026 (reference date) and no activity in the twelve months leading up to the reference date will be closed.
3. Require obtaining written declarations from mainland investors when opening new investment accounts to confirm that all funds used to support investment activities and related settlements are from legal sources outside mainland China.
These regulatory requirements issued by the Hong Kong Securities and Futures Commission and the Monetary Authority are an extension of joint efforts between the two regions to combat illegal cross-border stock trading activities. Prior to this, the China Securities Regulatory Commission had explicitly prohibited foreign securities firms from illegally soliciting domestic investors and initiated investigations into Futu Securities, Tiger Brokers, and Changqiao Securities for unauthorized business activities, confiscating illicit gains.
Reports suggest that regulatory authorities identified significant account opening deficiencies in the market after inspecting relevant financial institutions, including numerous mainland customers using counterfeit identification documents, false address proofs, or fake bank statements to open accounts. These accounts are often used to circumvent mainland capital controls, money laundering, or engage in illegal cross-border securities activities.
Analyses by Reuters regarding the latest joint measures from the Hong Kong Monetary Authority and Securities and Futures Commission indicate that Beijing’s crackdown on illegal cross-border securities trading now extends to traditional banks and other financial entities.
The additional compliance requirements are expected to further increase the difficulty for mainland investors to open accounts in Hong Kong. In the future, proving “legal funds from sources outside mainland China” would become a core requirement.
Simultaneously, financial institutions must conduct comprehensive reviews of historical account opening records from the past three years, leading to significantly higher compliance costs. Market expectations suggest that Hong Kong brokerages may gradually reduce acceptance of new mainland retail clients.
China CITIC Securities estimates that the crackdown on illegal cross-border stock trading by the China Securities Regulatory Commission has impacted assets in the Hong Kong market totaling between HK$200 billion and HK$250 billion.
(*This article is based on reports from financial outlets and Reuters.)