The Hong Kong Securities and Futures Commission (SFC) has issued a circular reminding intermediaries of the importance of appropriate account opening procedures for investors in and outside Hong Kong in order to fully comply with the know your client (KYC) and account opening procedures requirements under The Code of Conduct for Persons Licensed by or Registered with the SFC.

Under paragraph 5.1 of the Code of Conduct, intermediaries are required to take all reasonable steps to establish the true and full identity of each of their clients, and of each client’s financial situation, investment experience, and investment objectives.

The SFC urges intermediaries to take proper measures to authenticate the client’s identity and the client’s execution of account opening documents effectively. Intermediaries are reminded to ensure that the identity and other personal information in respect of their clients is accurate and up-to-date to ensure their clients are contactable.

The circular discourages intermediaries from using an affiliate, which itself is not a regulated financial institution and therefore not subject to similar KYC requirements to perform the task of certifying the identity documents of new clients and a client’s execution of account opening documents. The SFC says that such practices may result in inadequacies due to the lack of relevant knowledge and experience of the affiliate.

Copies of the

SFC’s press release and the http://bit.ly/1AcabXQ

Circular are available. http://bit.ly/1c26WpY