Requirement, set to take effect in the second half of 2022, tightens personal identification rules on the exchange to make it easier to ferret out misconduct
Hong Kong’s securities regulator said investors will need to register their real names with the city’s bourse to trade stocks from the second half of 2022, a move that tightens personal identification rules on the exchange in an effort to prevent misconduct.
Financial institutions will be required to submit proof of their clients’ identity to the Hong Kong Stock Exchange to place, buy or sell orders, the Securities and Futures Commission (SFC) said in a statement Tuesday.
Currently, investors are not required to register their real names on the exchange, with the exception of Chinese mainland residents who trade Hong Kong-listed shares through the Stock Connect program.
In December, the SFC initially proposed implementing the real name identity requirement by the first quarter of 2022 at the earliest, but now has decided to delay after receiving public feedback that called for more time for preparation.
The identification requirement will also apply to over-the-counter securities transactions in the first half of 2023, including those for ordinary shares and real estate investment trusts, the SFC said.
“We consider that the implementation of the regimes will significantly enhance Hong Kong’s surveillance against market misconduct and support the development of Hong Kong as an international financial centre,” the SFC said in the statement.
The regulator said in December that a lack of transparency in the market made it costly and time-consuming for authorities to identify problematic trading behaviors.
The new identification requirement will not apply to IPOs as they only involve subscriptions of shares but not trading, the regulator said.
Financial institutions will be required to submit proof of their clients’ identity to the Hong Kong Stock Exchange to place, buy or sell orders, the Securities and Futures Commission (SFC) said in a statement Tuesday.
Currently, investors are not required to register their real names on the exchange, with the exception of Chinese mainland residents who trade Hong Kong-listed shares through the Stock Connect program.
In December, the SFC initially proposed implementing the real name identity requirement by the first quarter of 2022 at the earliest, but now has decided to delay after receiving public feedback that called for more time for preparation.
The identification requirement will also apply to over-the-counter securities transactions in the first half of 2023, including those for ordinary shares and real estate investment trusts, the SFC said.
“We consider that the implementation of the regimes will significantly enhance Hong Kong’s surveillance against market misconduct and support the development of Hong Kong as an international financial centre,” the SFC said in the statement.
The regulator said in December that a lack of transparency in the market made it costly and time-consuming for authorities to identify problematic trading behaviors.
The new identification requirement will not apply to IPOs as they only involve subscriptions of shares but not trading, the regulator said.