According to Bloomberg, sources revealed that due to the tightening of cross-border investment fund flow supervision by regulators in Mainland China and Hong Kong, some private banks have delayed events held in mainland China and restricted employees from traveling to China for business trips.
The report indicated that UBS Group’s mid-year wealth outlook event scheduled to be held in mainland China this month has been postponed, but other events will proceed as planned. A event hosted by HSBC (0005) in China proceeded as scheduled, but organizers advised private bankers based in Hong Kong to avoid unnecessary business trips to China, leading to some scheduled attendees canceling their trips. An HSBC spokesperson stated that they look forward to holding their semi-annual investment outlook event in China next week, with related business trip plans proceeding as usual.
Earlier, China initiated a crackdown on cross-border illegal trading activities, which included requiring online brokerages to cease soliciting new onshore investors, prohibiting the use of mainland credit cards and debit cards to purchase insurance products in Hong Kong, and strengthening tax collection on overseas income.
The China Securities Regulatory Commission recently penalized a total of over $330 million three online brokerages for conducting business in China without the necessary permits and required non-compliant accounts to be rectified within two years.
Citing data from the International Financial Association, the report mentioned that driven by weak economic prospects in China and the global demand for asset diversification, Chinese residents transferred a record-high of $807 billion overseas last year. With the Chinese government intensifying efforts to curb capital outflow, banks are reevaluating their business strategies in China. Standard Chartered Bank stated that they are evaluating the relevant policies.
Hong Kong regulators have also mandated local banks to add new declaration clauses for potential customers, requiring those intending to open investment accounts to confirm that the source of their investment funds is not from mainland China.
Insiders noted that these measures have impacted new business, as firms are concerned that even if customers sign declarations, regulators may still require specific evidence of the source of overseas assets.