Hong Kong's Securities and Futures Commission (SFC) published a clarification on June 9 evening via its official WeChat account, addressing questions about account opening rules for mainland Chinese investors following a May 22 circular. The SFC stated that licensed Hong Kong companies can continue opening new accounts for mainland Chinese investors—defined as those using People's Republic of China resident identity cards and/or passports—provided all account opening requirements are met, including Know Your Customer (KYC) and customer due diligence obligations. Licensed companies may also continue serving existing mainland clients, provided services are not delivered within mainland China territory and all relevant laws and regulatory requirements in Hong Kong and applicable jurisdictions are observed. The announcement follows a May 22, 2026 joint notice issued by China's securities regulator and seven other departments, which introduced a comprehensive two-year plan to eliminate illegal cross-border securities, futures, and fund operations targeting mainland investors.
Hong Kong SFC Clarifies Account Opening Compliance Requirements for Mainland Investors
The Hong Kong SFC referenced FAQ (9) in its May 22 circular, confirming that licensed Hong Kong companies can continue opening new accounts for mainland Chinese investors. The SFC specified that compliance with all account opening regulations is mandatory, including adherence to Know Your Customer (KYC) and customer due diligence requirements, obtaining necessary declarations, and making designated arrangements for bank accounts.
For existing mainland Chinese clients, licensed Hong Kong companies can continue providing services under two conditions: the services must not be provided within mainland China territory, and the companies must comply with all relevant laws and regulatory requirements in Hong Kong and applicable jurisdictions.
China's CSRC and Seven Departments Issue Two-Year Rectification Plan on May 22, 2026
On May 22, 2026, China's securities regulator and seven other departments jointly issued the "Implementation Plan for Comprehensive Rectification of Illegal Cross-Border Securities, Futures, and Fund Operations." The Hong Kong SFC updated its account opening rules for mainland clients in coordination with this notice, effectively closing regulatory gaps around mainland residents' cross-border trading activities.
According to the plan, regulatory authorities will completely eliminate illegal cross-border operations by overseas securities, futures, and fund institutions within two years. Existing mainland clients will only be permitted to sell holdings and withdraw funds on a one-way basis. Domestic websites, trading software, and supporting servers will be fully shut down by the end of the two-year period.
The Hong Kong SFC noted that it has taken note of the joint notice issued by China's securities regulator and seven other departments. The SFC emphasized that the relevant requirements apply to financial institutions in other jurisdictions—not limited to Hong Kong—when providing services to mainland Chinese investors.
FAQ
What did the Hong Kong SFC clarify on June 9 evening?
The Hong Kong SFC clarified that licensed Hong Kong companies can continue opening new accounts for mainland Chinese investors and serving existing mainland clients, provided all compliance requirements are met and services are not delivered within mainland China territory.
What is the timeline for China's cross-border rectification plan issued on May 22, 2026?
The plan establishes a two-year timeline to completely eliminate illegal cross-border securities, futures, and fund operations. During this period, existing mainland clients will only be allowed to sell holdings and withdraw funds, and all domestic websites, trading software, and supporting servers will be shut down.
