Mainland China investors face a critical juncture in the review of dormant accounts at Hong Kong banks, with source of funds declarations proving crucial for account reactivation.

TechFlow reports on August 24 that recent indications suggest banks in Hong Kong have initiated a source of funds declaration procedure for certain existing mainland investment clients, setting deadlines such as August 20 (failure to submit may result in the suspension of investment services) and September 12 (non-compliance could lead to the termination of investment services).

Previously, in accordance with requirements from the Securities and Futures Commission and the Hong Kong Monetary Authority, some banks had already begun requiring mainland investors opening new accounts to confirm that their funds originated from legitimate overseas channels. This latest source-of-funds verification procedure targets existing mainland investor accounts, drawing significant attention and discussion. It is understood that several Hong Kong-licensed institutions, including HSBC Hong Kong and Hong Kong branches of mainland Chinese banks, have indeed implemented these measures recently; however, they primarily apply to long-term dormant accounts. (Yicai)