Hong Kong banks tighten rules in mainland China as Beijing pores over capital outflows
Some banks are exercising more caution with offshore accounts for their mainland China clients amid tighter investment controls from Beijing
As Beijing steps up its regulatory oversight on capital outflows, residents of mainland China are encountering greater constraints on opening offshore accounts – including outright prohibition – at mainland branches of major Hong Kong banks.
Such services had been valued by the bank’s high-net-worth clients who hoped to allocate their assets around the globe, the manager said, adding that the move came as a surprise for bank patrons.
The bank’s witness service allows those in Shanghai to set up Hong Kong deposit and investment accounts without leaving the city.
However, the privilege does come with conditions; for instance, clients are required to park a minimum of 500,000 yuan (US$73,943) in their domestic accounts.
The BEA account manager attributed the suspension to tightened regulatory rules in Hong Kong, where the bank is based, saying “the bank needs time to sort out relevant policies”.