Hong Kong requires investors to trade stocks under real name

Hong Kong’s securities regulator said investors will need to register their real names with the city’s stock exchange to trade shares from the second half of 2022, a move that tightens personal identification rules on the stock market in order to avoid misconduct.

Financial institutions will be required to present proof of identity of their clients to the Hong Kong Stock Exchange to place, buy or sell orders, the Securities and Futures Commission (SFC) said Tuesday in a statement.

Currently, investors are not required to register their real name on the stock exchange, except for residents of mainland China who trade Hong Kong-listed stocks through the Stock Connect program.

In December, the SFC initially proposed implement the real name identity requirement by Q1 2022 at the earliest, but has now decided to delay after receiving public comments that requested more time to prepare.

The identification requirement will also apply to OTC securities transactions in the first half of 2023, including those involving common stocks and real estate investment trusts, the SFC said.

“We believe that the implementation of the regimes will significantly strengthen Hong Kong’s surveillance against market misconduct and support Hong Kong’s development as an international financial center,” 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 business behavior.

The new identification requirement will not apply to IPOs because they only involve stock subscriptions but not trading, the regulator said.

Contact reporter Tang Ziyi ([email protected]) and editor-in-chief Michael Bellart ([email protected])

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