SFC introduces new regimes in investor identification, transaction reporting

The new regimes are expected to be launched in H2 2022 and H1 2023.

The Securities and Futures Commission (SFC) will be introducing two new regimes in investor identification and over-the counter (OTC) securities transaction reporting.

The SFC had issued the consultation conclusions on the proposals, in which the respondents mostly agreed to require licensed corporations and registered institutions to submit names and identity documents of clients placing securities orders on The Stock Exchange of Hong Kong Limited (SEHK).

The proposal also provided that information on OTC securities transactions in ordinary shares and REITs listed on SEHK will be reported to the SFC.

The new regimes will enable effective and timely surveillance of the Hong Kong securities market,” Rico Leung, the SFC’s executive director of Supervision of Markets, said.

“They will help reinforce market integrity and promote investor confidence, which are vital to Hong Kong’s status as a premier international financial centre.”

The investor identification regime is expected to be launched in the second half of 2022 and the OTC securities transactions reporting regime in the first half of 2023, subject to the completion of system testing and market rehearsals.

To provide more time for the industry to prepare, the implementation timelines were extended after taking consultation feedback into account.

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