Securities & Futures Commission of Hong Kong

Acceptable account opening approaches

For the purposes of paragraph 5.1 of the Code of Conduct, the SFC considers the following account opening approaches acceptable:

Face-to-face

The account opening documents are executed in the presence of an employee of the licensed or registered person.

Non-face-to-face

1.    Certified by other persons

Where the account opening documents are not executed in the presence of an employee of the licensed or registered person, the signing of the client agreement (as defined in paragraph 6.1 of the Code of Conduct) and sighting of related identity documents should be certified by any other licensed or registered person, an affiliate of a licensed or registered person, a JP (Justice of the Peace), or a professional person such as a branch manager of a bank, certified public accountant, lawyer, notary public or chartered secretary1.

The SFC expects that any affiliate performing client identity verification for account opening purpose should be a regulated financial institution.

2.    Certification services

Certification services that are recognized by the Electronic Transactions Ordinance (Cap. 553) (ETO), such as the certification services available from the Hongkong Post, may also be employed.

There are certification authorities outside Hong Kong whose electronic signature certificates (recognised signing certificates) have obtained mutual recognition status2 accepted by the HKSAR government. The SFC considers that the use of the certification services provided by such certification authorities outside Hong Kong could be accepted for client identity verification.

3.    Mail approach

The identity of the client (other than corporate entities), may be properly verified if the licensed or registered person complies with the following procedural steps:

(i) the new client sends to the licensed or registered person a signed physical copy of the client agreement (see paragraph 6.2 of the Code of Conduct) together with a copy of the client's identity document (identity card or relevant sections of the client's passport) for verification of the client's signature and identity;

(ii) the licensed or registered person should obtain and encash a cheque (amount not less than HK$10,0003 and bearing the client's name as shown in his identity document) issued by the new client and drawn on the client's account with a licensed bank in Hong Kong;

(iii) the signature on the cheque issued by the client and the signature on the client agreement must be the same;

(iv) the client is informed (in the client agreement or by way of a notice) of this account opening procedure and the conditions imposed, in particular the condition that the new account will not be activated until the cheque is cleared; and

(v) proper records are kept by the licensed or registered person to demonstrate that the client identification procedures have been followed satisfactorily.

4.    Online onboarding of clients using a designated bank account in Hong Kong

(i) Obtain a client agreement4 which is signed by a client by way of an electronic signature5 together with a copy of the client's identity document (an identity card or relevant sections of the client's passport);

(ii) Successfully transfer6 an initial deposit of not less than HK$10,000 from a bank account in the client's name maintained with a licensed bank in Hong Kong (Designated Bank Account7) to the intermediary's bank account;

(iii) Conduct all future deposits and withdrawals for the client's trading account through the Designated Bank Account(s) only; and

(iv) Maintain proper records of the account opening process for each client which are readily accessible for compliance checking and audit purposes.

5.    Remote onboarding of overseas individual clients

Please click here for the "Circular to intermediaries - Remote onboarding of overseas individual clients" dated 28 June 2019.

Please click here for the latest list of eligible jurisdictions.

 

1 A chartered secretary refers to a person who is a current full member of the Institute of Chartered Secretaries and Administrators or its designated divisions.

2 Please refer to the following website for the latest Trust List of Certificate Types with Mutual Recognition Status. https://www.ogcio.gov.hk/en/our_work/business/mainland/cepa/mr_ecert/trust_list/hk_guangdong_ecert_trust.html

3 The minimum cheque amount required is subject to periodic review and will be revised when appropriate.

4 Section 17 of the ETO provides that in the context of the formation of contracts, an offer and the acceptance of an offer may be in whole or in part expressed by means of electronic records, unless otherwise agreed by the parties.

5 "Electronic signature" is defined in section 2(1) of the ETO to mean any letters, characters, numbers or other symbols in digital form attached to or logically associated with an electronic record, and executed or adopted for the purpose of authenticating or approving the electronic record.

6 If the intermediary does not receive sufficient information about the sender from its receiving bank, the intermediary should obtain satisfactory evidence from the client to confirm that the transfer was made from the client's bank account.

7 The client may designate more than one bank account as Designated Bank Account provided that the same verification by way of a bank transfer is completed.

3.4530 s