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Hong Kong Investor Identification Regime (HKIDR) and Over-The-Counter Securities Transactions Reporting Regime (OTCR)

Investment involves risks. The prices of securities fluctuate, sometimes dramatically. The prices of a security may move up or down and may become valueless. It is as likely that losses will be incurred rather than profit made as a result of buying and selling securities. Investors should read the relevant Risk Disclosure Statements before making any investment decision.

About HKIDR and OTCR

The Securities and Futures Commission (“SFC”) has introduced the Investor Identification Regime (“HKIDR”) at trading level for the securities market in Hong Kong and an Over-The-Counter Securities Transactions Reporting Regime (“OTCR”) for shares listed on the Stock Exchange of Hong Kong (SEHK). HKIDR has been launched on 20 March 2023, and OTCR will be launched on 25 September 2023.

What is the impact for client?

Under the HKIDR, Hang Seng Bank Limited ("the Bank”) will have to assign a Broker-Client Assigned Number (BCAN) to each of our securities client and tag the BCAN to our client’s securities orders. The Bank will also have to submit to SEHK’s data repository the client identification data (CID) of clients (i.e. names and identity document information) placing securities orders on SEHK or who conduct off-exchange trades reportable to SEHK. This will allow relevant regulators to quickly obtain information about investors who place orders and enhance relevant regulators’ market surveillance function.

Separately, information about OTC securities transactions in ordinary shares and real estate investment trusts listed on SEHK as well as deposits and withdrawals of physical share certificates will be reported to the SFC under the OTCR.

What is CID?

The Bank will disclose and transfer the following client data* as CID to relevant regulators (including but not limited to SEHK and/or SFC):

For a corporate client:

Full name as shown on your identity document;
Identity document’s issuing country or jurisdiction;
Identity document type (order priority: (1) Legal Entity Identifier^ (“LEI”) registration document; (2) Certificate of incorporation; (3) Business registration certificate; (4) other equivalent documents); and
Identity document number on your identity document

For a client that is trust:

the CID of the trustee, which should be the same as that of a corporate client as set out above; or
in the case of a trust which is an investment fund (also known as unit trust or collective investment scheme), the CID of the asset management company or the individual fund, as appropriate, which has opened a trading account with the Bank.

* Should there be any change in your client data, please provide the latest client data to the Bank in writing immediately (e.g. if you have LEI and your LEI has lapsed and/or has been renewed, you should submit your updated LEI information to the Bank immediately).

^ LEI refers to the Legal Entity Identifier which is a 20-character alpha-numeric code under the Global LEI System adopted by the Financial Stability Board to uniquely identify distinct legal entities which participate in financial transactions

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Processing of CID and BCAN

Being the Bank’s non-personal clients, you are deemed to agree that the Bank may collect, store, process, use, disclose and transfer your client data (including your CID and BCAN(s)) as required for the Bank to provide services to you in relation to securities listed or tradedon the SEHK and for complying with the rules and requirements of SEHK and SFC in effect from time to time. Without limiting the foregoing, this includes:

disclosing and transferring your client data (including CID and BCAN(s)) to relevant regulators (including but not limited to SEHK and/or SFC) in accordance with the rules and requirements of SEHK and SFC in effect from time to time;
allowing SEHK to:(i) collect, store, process and use your client data (including CID and BCAN(s))for market surveillance and monitoring purposes and enforcement of the Rules ofthe Exchange of SEHK; and (ii) disclose and transfer such information to the relevant regulators and law enforcement agencies in Hong Kong (including, but not limited to, the SFC) so as to facilitate the performance of their statutory functions with respect to the Hong Kong financial markets; and (iii) use such information for conducting analysis for the purposes of market oversight; and
allowing SFC to:(i) collect, store, process and use your client data (including CID and BCAN(s))for the performance of its statutory functions including monitoring, surveillance and enforcement functions with respect to the Hong Kong financial markets; and (ii) disclose and transfer such information to relevant regulators and law enforcement agencies in Hong Kong in accordance with applicable laws or regulatory requirements.

If you do not agree to the Bank’s processing of your client data (including your CID and BCAN(s)) mentioned above, you can update your consent status via “Local Securities - Client Consent” page under “Other Related Service” of “Investment” section after log on to Hang Seng Business e-Banking starting from 5 September 2022. Alternatively, you may download the consent status update form available at the Bank’s website starting from 5 September 2022 and return the completed original form to your relationship manager or any business banking centres of the Bank.

Consequences if client fails or refuses to provide or update CID or does not agree to the Bank’s processing of client data (including CID and BCAN(s))

If the Bank cannot process client data including CID and BCAN(s) as required (e.g. if client fails or refuses to provide or update the Bank its CID or does not agree to the Bank’s processing of its CID and BCAN), the Bank will not be able to provide certain services to the client in relation to securities listed or traded on SEHK. (e.g. under the HKIDR, the Bank will not submit any buy orders or trades to SEHK for the client. Similarly, under OTCR, the Bank will not effect transfers of shares or deposits of physical shares certificate into client account.)

FAQ:

Q1: How can we submit LEI information to the Bank if our company has obtained one?

You can download the LEI supplementary form via the Bank’s website starting from 25 July 2022 and return the completed original form to your relationship manager or any Business Banking Centres of the Bank. In case we have not received your LEI information by the time you placed with the Bank any relevant transaction relating to securities listed or traded on SEHK (e.g. buy orders or trades, transfer in of shares or deposits of physical shares certificate, etc.), you will be deemed to have confirmed that you do not have a LEI number.

Q2: How do we know if we have successfully registered with SEHK under HKIDR?

After HKIDR is implemented, the Bank will assign BCAN and submit it together with your CID to SEHK’s data repository. Upon receipt of confirmation from SEHK on your CID registration, the Bank shall update the consent status recorded in the Bank’s system. Please check the latest status in "Investments" > "Securities" > "HK Stocks Trading" after logged in to Business e-Banking. Alternatively, you can contact our 24-hour Business Partner Direct at (852) 2198 8000, press "1", "1", "6", and then "1" after selecting language, to enquire your latest status.

Q3: How can we find more details about HKIDR and OTCR?

To find out more details about HKIDR or OTCR, please visit SFC’s and HKEX’s website.