Banks in Hong Kong tighten investment account rules after Beijing's crackdown

HONG KONG, ⁠May 27 (Reuters) - Foreign and Chinese ​banks in Hong Kong are moving quickly to comply with a Beijing-led crackdown on cross-border investment, ​according ‌to documents and sources with knowledge of the matter.

China said on Friday it ⁠would punish brokers it accused of illegally moving ⁠money to foreign markets, while ​Hong Kong's securities regulator tightened rules for the sector.

Hong Kong's largest lender HSBC has asked mainland clients seeking to open investment accounts to sign a declaration confirming ​their funds ‌come from overseas rather than China, two of the sources said.

Smaller affiliate Hang Seng Bank has issued a similar form to mainland clients, a separate source said.

Bank of China Hong Kong from this week has ​also begun asking clients to clarify the source of funds when opening ‌investment accounts, two other sources said.

HSBC, Hang Seng and BOC HK did not immediately respond to requests for comment.

The ‌moves show the broader impact of Beijing's crackdown, which extends beyond the brokerage industry.

In a circular published the same day, the Hong Kong Monetary Authority ​asked licensed banks to tighten controls on new trading account openings.

A spokesperson for Hong ‌Kong Association of Banks said the tightened requirements for investment accounts on mainland clients "will have no significant impact on the account opening process".

The banking industry will conduct ⁠reviews ⁠in accordance with the latest regulatory guidelines, the spokesperson ‌said in a statement.

Previously, mainland residents often moved capital offshore via unofficial channels and opened accounts ​with local ​lenders, despite Beijing's strict capital controls.

The three banks are ‌among the most popular overseas lenders for mainland visitors opening accounts when travelling across the border. (Reporting by Samuel Shen and Winni Zhou in Shanghai and Selena Li in Hong Kong. Editing by Mark Potter)

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