HK’s stock investor ID system likely to start mid-2018

HONG KONG: An investor identity system covering the northbound stock trading link between Hong Kong and mainland China is expected to start in the middle of next year, according to Ashley Alder, chief executive officer of the city’s Securities and Futures Commission (SFC).

While the mechanism is designed to cover those buying and selling mainland-listed equities through the connect, Alder said in a speech at the Thomson Reuters Pan-Asian Regulatory Summit yesterday that he hoped Chinese authorities will also share information on southbound investors.

While the two markets are integrating more closely through the series of trading links, their regulatory frameworks are very different.

The SFC only has real-time information about which brokers have executed a trade —unlike the mainland, where authorities can see which individuals have put in the orders.

The Hong Kong Investment Funds Association has called for a system that would identify the investment company, but not the individual fund or person.

Both markets are concerned about cross-border risk migration, Alder said in his speech.

Chinese authorities are unlikely to expand the number of trading connections unless the risks can be contained, he said.

Hong Kong’s market has three links with the mainland — two stock systems with exchanges in Shanghai and Shenzhen and one for bonds, which started in July. Bloomberg