On 30 November 2017, the Securities and Futures Commission (SFC) announced that it had reached an agreement with the China Securities Regulatory Commission (CSRC) on proposals to introduce an investor identification (investor ID) regime for Northbound trading under the Mainland-Hong Kong Stock Connect schemes. The regime is intended to improve Mainland-Hong Kong cross-border market surveillance and is scheduled to be implemented by the third quarter of 2018.

The Hong Kong Exchanges and Clearing Limited (HKEX) has published a circular, information paper and FAQs to provide further details on the proposed regime (which can be accessed from a dedicated HKEX webpage).

As soon as possible after the investor ID regime for Northbound trading has been implemented, a similar regime for Southbound trading will be introduced, as part of the SFC and the CSRC’s plan to further strengthen regulatory collaboration in combatting market misconduct. In the longer term, the SFC intends to implement an investor ID regime covering all trading on the SEHK.

Details regarding the proposed investor ID regime for Northbound trading and the rationale for introducing the regime can be found in our recent e-bulletin. if you wish to discuss this further, please do not hesitate to reach out to our Hong Kong team (the contact details of which are set out in the e-bulletin) or your usual Herbert Smith Freehills contact.