Dec 01, 2017 05:53 PM

Quick Take: Hong Kong’s Stock-Connect Investors Will Have to Trade Under Their Real Names

Photo: IC
Photo: IC

The securities regulators on the Chinese mainland and Hong Kong have agreed to introduce an identification system for offshore investors who trade through the stock-connect programs from Hong Kong.

By the third quarter of next year, so-called “northbound” investors must register with their real names, Hong Kong’s Securities & Futures Commission (SFC) said in a statement Thursday.

Investors on the Chinese mainland must reveal their real names and identification numbers to brokerages before they can trade in securities — a policy aimed at curbing money laundering and other illegal activities. But investors in Hong Kong, who have access to mainland-listed stocks and bonds under the Shenzhen and Shanghai Stock Connects, are not currently required to do so.

Identification of “southbound” investors, who trade Hong Kong stocks from inside the Chinese mainland, will be introduced “as soon as possible” after the system for northbound trading is implemented, the SFC added.

The new registration system, which has been in the works for months, will bring the Hong Kong market’s regulatory framework more in line with mainland efforts to increase transparency.

"This is critical to safeguard market integrity and to strengthen the protection of investors in both markets,” Ashley Alder, CEO of the SFC, said in the same statement.

“We also aim to implement an investor identification regime to cover all trading on the (Hong Kong stock exchange) in the longer term. This is in line with similar initiatives in other leading global markets,” Adler added.

Northbound trading made up about 6% of market turnover in the Chinese market this year, the SFC said earlier in October. Southbound trading accounted for 10% of the Hong Kong market’s total turnover this year.

Contact reporter Aries Poon (

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