Hong Kong | Regulators want ID requirements for cross-border trading

Hong Kong financial regulators are seeking to introduce an identification program for investors trading stocks on the mainland, the Financial Times (FT) reported, citing an HKSAR legislator.

The proposed regulation will require investors to register their real name and identification card information when trading, with the intention of preventing market manipulation through greater accountability.

It comes as regulators on the mainland and in Hong Kong are becoming increasingly concerned about market manipulation and have sought to rein in volatile trading.

Christopher Cheung, a Hong Kong lawmaker representing the city’s financial services industry, told the FT that regulators were likely to disclose the identification program within the next few months. The rules could come into effect as early as next year, he said.

“It takes time to improve the clearing and settlement system, the brokerages will need to install new software, and they will need to sign new contracts with their customers to make sure that they are aware of the new information collection,” he said.

Meanwhile, official entities responsible for operating the Hong Kong Stock Exchange refused to comment.

Currently, investors in Hong Kong are able to trade shares on the mainland through the Hong Kong-Shanghai Stock Connect, launched in 2014, and the subsequent Hong Kong-Shenzhen Connect. The same programs enable mainland investors to trade on the Hong Kong Stock Exchange. Moreover, in June, the Central Government signed an agreement with Hong Kong local authorities to promote cross-border investment, making both markets more accessible to investment from traders in the other.