Hong Kong Banks Ask Mainland Clients to Verify Offshore Source of Investment Funds

Banks in Hong Kong have begun asking existing clients from the Chinese mainland to declare that funds used for their investment activities come from legal sources outside the mainland, as regulators tighten oversight of cross-border trading.

The compliance push follows a Hong Kong Monetary Authority (HKMA) directive issued in May and marks the latest step by regulators to close loopholes in cross-border securities investment by mainland residents while clearing out inactive accounts.