In late May, the Chinese Communist Party officially announced a crackdown on illegal cross-border stock trading, causing various institutions to take action. TikTok, a short video platform, has joined the efforts to combat this activity as per official requirements. Over the past two weeks, TikTok has removed over 1500 short videos teaching Chinese users how to handle Hong Kong bank accounts and securities accounts related to cross-border investments.
These types of content used to spread rapidly on short video platforms, mainly under the guise of topics like “investment and financial literacy,” “teaching financial freedom,” and “overseas asset allocation.” Many of these videos have served as a conduit to overseas brokerages or financial services, leading regulators to classify them as “inducing financial information.”
According to reports from Caixin Media, the supervising authorities at TikTok explicitly stated that they strictly prohibit content related to “inducing illegal cross-border investments,” which includes teaching or guiding users on opening a Hong Kong bank account, setting up a Hong Kong securities account, and providing Hong Kong card opening services to unqualified individuals.
The phrase “including but not limited to” signifies that any activities deemed to facilitate cross-border financial services could fall under the scope of regulation, providing regulators with flexibility in enforcement.
Furthermore, the supervising authorities at TikTok mentioned that various departments of the Chinese Communist Party had already issued requirements on regulating cross-border securities and futures operations. In the past two weeks, TikTok has dealt with over 1500 related violations, and they plan to continue strengthening their control over short video content on the platform by strictly removing all kinds of irregular information.
This form of “platform self-inspection” is a common model in Chinese internet governance.
On May 22, the China Securities Regulatory Commission and other eight departments jointly issued a document, stating a comprehensive two-year crackdown on illegal cross-border securities trading activities by foreign brokerages. During the crackdown period, only sell trades will be allowed. Simultaneously, three foreign brokerages, Tiger Brokers, Futu, and Chongyang, were accused of “disrupting market order,” and all their illegal gains both domestically and overseas will be confiscated.
The regulatory focus centers around three main points: whether customer solicitation is conducted domestically, whether substantial trading channels are provided, and whether forex and cross-border financial regulations are circumvented.
After the Chinese Communist Party’s announcement of the crackdown on illegal cross-border stock trading, several Hong Kong banks tightened their policies on account openings for mainland residents.
According to a report from Huaxia Times, mainland investor Wang Hui (alias) who specifically traveled to Hong Kong to open an account returned empty-handed. After attempting online account applications, he was informed that he did not pass the bank’s due diligence, ultimately leading to failure.
“Wang Hui stated that one must work and live in Hong Kong or hold Hong Kong residency status to open an account,” according to the report.
In the past, Bank of China Hong Kong was a popular choice for many mainland investors opening accounts in Hong Kong. Various strategies for account openings were circulated online, detailing how to make appointments or directly “walk in” for account openings. However, since the end of May this year, with tightened regulations on individual cross-border investments, including Bank of China Hong Kong, Bank of East Asia, Bank of East Asia, and Public Bank, many Hong Kong banks have gradually tightened their account opening policies for mainland residents, and reasons such as “buying Hong Kong insurance” and “overseas spending” that were previously common reasons for account openings are no longer accepted. Moreover, some banks have enhanced their scrutiny on account opening applications, significantly extending the review process.
A banking professional in Hong Kong revealed that as mainland residents’ cross-border investment policies have tightened, the difficulty of opening savings accounts in Hong Kong banks has increased, making it challenging for non-local residents to open accounts directly.
Bank of China Hong Kong, Bank of East Asia, Public Bank, and several other banks have closed their account opening policies for mainland residents. Numerous investors have reported noticeable delays in account opening reviews at HSBC, Hang Seng Bank, and ABC Asia. Recently, Bank of East Asia also suspended referral and witnessing services for mainland individuals opening accounts in Hong Kong.
Of note, the previously popular digital bank for account openings, WeLab Bank in Hong Kong, has also tightened its account opening policies.