SFC Concludes on Hong Kong Investor Identification Regime and OTC Securities Transactions Reporting Regime

Clinton Morrow

Partner, Charltons

On 10 August 2021, the Hong Kong Securities and Futures Commission (“SFC”) published its Consultation Conclusions1 on its proposals to introduce (1) an investor identification regime for the Hong Kong securities market (“HKIDR”) and (2) an over-the-counter securities transactions reporting regime (“OTCR”) for shares listed on the Stock Exchange of Hong Kong (“HKEX”). The introduction of these systems aims to make it easier for the SFC to identify investors who make suspicious orders or trades and enhance its surveillance function.

The Consultation Conclusions were published after receiving feedback regarding the SFC’s Consultation Paper2 issued on 4 December 2020. For further information on the Consultation Paper, please see our December 2020 newsletter.3 After having considered the market feedback and with respondents broadly agreeing with the proposals, the SFC will proceed to implement both regimes with minor modifications. The Hong Kong investor identification regime is expected to launch in the second half of 2022 and the over-the-counter securities transactions reporting regime in the first half of 2023.

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