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.

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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