{"id":750,"date":"2026-09-13T23:56:43","date_gmt":"2026-09-13T15:56:43","guid":{"rendered":"https:\/\/llawsw.com\/insights\/account-opening-forged-documents-internal-review-2\/"},"modified":"2026-09-15T19:07:36","modified_gmt":"2026-09-15T11:07:36","slug":"account-opening-forged-documents-internal-review","status":"publish","type":"insight","link":"https:\/\/llawsw.com\/zh-hant\/insights\/account-opening-forged-documents-internal-review\/","title":{"rendered":"\u82e5\u4e8b\u5f8c\u767c\u73fe\u958b\u6236\u6587\u4ef6\u53ef\u7591\u6216\u507d\u9020\uff0c\u8b49\u76e3\u6703\u671f\u671b\u6301\u724c\u6cd5\u5718\u9032\u884c\u751a\u9ebc\u5167\u90e8\u6838\u67e5\uff1f\u61c9\u95dc\u9589\u54ea\u4e9b\u5e33\u6236\uff1f"},"content":{"rendered":"\n\n\n\n\n\n\n\n\n
<\/th>\nAll licensed corporations (Appendix A)<\/th>\nChinese Mainland individual investors (Appendix B)<\/th>\n<\/tr>\n<\/thead>\n
Basis<\/th>\nCircular 26EC29 body and Appendix A item 1<\/td>\nAppendix B Measures 1–3; definition: an individual using a PRC resident identity card and\/or passport as identification<\/td>\n<\/tr>\n
Who acts<\/th>\nEvery licensed corporation<\/td>\nMeasures 1 and 2: selected LCs, upon the SFC’s request<\/strong>; Measure 3: all LCs<\/strong> from 22 May 2026<\/td>\n<\/tr>\n
Review<\/th>\nInternal review as soon as practicable; reviewers independent of account opening (FAQ 6); risk-based scope, expanded if significant deficiencies (FAQ 7)<\/td>\nMeasure 1: Account Opening Review by an independent external consultant<\/strong> (accounts opened since January 2023 or an SFC-specified period), 3 months; Measure 2: Dormant Account Review, 3 months<\/td>\n<\/tr>\n
Close \/ terminate<\/th>\nForged<\/strong> documents (including identification documents): terminate the relationship; close per Measure 1(ii)–(vii). FAQ 8: questionable or forged → the same steps<\/td>\nMeasure 1: close identified accounts within 6 months of review completion (exceptions). Measure 2: zero-balance dormant accounts; reactivation per Measure 3(i)–(ii); close within 6 months of the SFC’s request if not reactivated; FAQ 3 relationship-based carve-out; FAQ 4 two-week reactivation window<\/td>\n<\/tr>\n
Out of Appendix B scope<\/th>\n—<\/td>\nCorporate and institutional clients (FAQ 10); Southbound Wealth Management Connect and other jointly developed schemes<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Why did the SFC issue Circular 26EC29?<\/h2>\n

Circular 26EC29 (22 May 2026), Expected controls for account opening and maintaining relationships with clients<\/em>, follows the SFC’s review of 12 licensed securities brokers’<\/strong> account-opening practices. The review found significant deficiencies in due diligence on account-opening documentation. Some brokers accepted questionable or forged documents<\/strong> and approved applications that should have been rejected.<\/p>\n

Irregularities missed (Appendix A) included securities account statements from other brokers with identical trade details — only the names, addresses or account numbers altered — and font or format anomalies, conflicting information within the same document, invalid or impossible dates, unreconciled balances, and missing or invalid QR codes.<\/p>\n

In the most serious cases, over 50% of sampled client accounts had used forged documents at account opening — the worst cases sampled, not the whole market. The SFC has zero tolerance for questionable or forged documents in account opening and maintaining relationships, and will take supervisory and enforcement action where needed.<\/p>\n

What internal review must every licensed corporation conduct?<\/h2>\n

Every LC should conduct an internal review as soon as practicable<\/strong> to detect whether questionable or forged documents have been accepted for account opening (Appendix A, item 1).<\/p>\n

    \n
  • Who reviews.<\/strong> Personnel with the relevant knowledge and skills, independent of the account-opening process<\/strong> — compliance staff, group internal audit, or external consultants (FAQ 6).<\/li>\n
  • Scope.<\/strong> The SFC prescribes no method: adopt a risk-based approach<\/strong> with reasonable methodology and selection criteria; if significant deficiencies surface, extend the scope and sample size (FAQ 7).<\/li>\n
  • What findings trigger.<\/strong> Doubts about authenticity plus a high-risk assessment → refrain from establishing the relationship, or terminate as soon as practicable<\/strong>. Accounts involved in forged documents (including identification documents)<\/strong> → terminate and close by reference to Measure 1(ii)–(vii)<\/strong> of Appendix B; FAQ 8 applies the same steps where the review detects questionable or forged documents.<\/li>\n<\/ul>\n

    LCs should also warn prospective clients<\/strong> of the consequences of submitting forged documents: account termination, a report to law enforcement agencies, and possible criminal prosecution.<\/p>\n

    The underlying standards are not new: Code of Conduct paragraph 5.1 (each client’s true and full identity); AML\/CFT Guideline paragraphs 4.1.9(d) (CDD when veracity of identification information is doubted) and 4.17.1 (termination where CDD cannot be completed).<\/p>\n

    What extra measures apply to Chinese Mainland individual investors?<\/h2>\n

    Most questionable or forged documents in the review involved accounts of Chinese Mainland investors — individuals who used a PRC resident identity card and\/or passport as identification, per the LC’s records or at account opening — so Appendix B adds measures for that group. Keep these distinct from the market-wide baseline:<\/p>\n

      \n
    • Measure 1 — review and closure of accounts opened with questionable or forged documents.<\/strong> Selected LCs only, upon the SFC’s request<\/strong>. An independent external consultant<\/strong> conducts an Account Opening Review of accounts opened since January 2023 (or an SFC-specified timeframe), to an SFC-prescribed scope and methodology, within three months<\/strong> of the request (notify the SFC immediately if unable to complete — in any case within one month — unless reasonably justified). Identity documents from certification authorities with HKSAR-accepted mutual-recognition status may be excluded (low-risk). Close identified accounts within six months<\/strong> of review completion (exceptions, eg court orders).<\/li>\n
    • Measure 2 — closure of zero-balance dormant accounts.<\/strong> Selected LCs, upon the SFC’s request<\/strong>. Target: no asset balance as of 22 May 2026 (or other reference date) and<\/strong> no client-initiated activity in the prior 12 months. Identify within three months; notify and suspend. Reactivation — refreshed KYC\/CDD plus the Measure 3(i) and (ii) declaration and bank-account steps, expected within two weeks<\/strong> of identification (FAQ 4); otherwise close within six months<\/strong> of the SFC’s request. Where the client keeps an active account, a relationship-based approach leaves the dormant accounts open (FAQ 3). A dormant account that also involved questionable or forged documents is closed via Measure 1(ii)–(vii), not the lighter Measure 2 path.<\/li>\n
    • Measure 3 — new account openings, all LCs from 22 May 2026.<\/strong> Obtain a written declaration<\/strong> (paper or electronic — FAQ 5): lawful source of funds outside the Chinese Mainland; no account previously closed or suspended by any LC or bank for questionable or forged documents; changes notified within 7 business days; and consent to disclosure to law enforcement and regulators on request. All deposits and withdrawals must go through own-name<\/strong> bank accounts with banks licensed in Hong Kong or supervised by banking regulators in eligible jurisdictions. Unlawful funding or breach of Mainland capital control regulations → close via Measure 1(ii)–(vii).<\/li>\n<\/ul>\n

      How should forged-document accounts be closed?<\/h2>\n

      The same steps apply in every case the circular points to Measure 1(ii)–(vii) — from the Appendix A baseline to the Appendix B measures.<\/p>\n

        \n
      1. Give advance written notice<\/strong> and suspend new client-initiated transactions (except closing existing positions or reducing balances to settle obligations); allow reasonable time<\/strong> to manage assets — unwind positions, transfer funds to the client’s bank account (where possible, the one the funds came from) — then close as soon as practicable once assets are withdrawn.<\/li>\n
      2. Close within six months<\/strong> (Measure 1: from review completion; Measure 2: from the SFC’s request), unless exceptional circumstances apply; keep records of any justification for delay.<\/li>\n
      3. Act under client agreements and safeguard client assets<\/strong> (Client Money Rules; Client Securities Rules) until formal closure.<\/li>\n
      4. Allocate sufficient resources for client enquiries and complaints<\/strong>.<\/li>\n
      5. Review the accounts’ transactions for suspicious-activity red flags and report to law enforcement<\/strong> where necessary (including suspicious transaction reports).<\/li>\n
      6. Prohibit<\/strong> the clients concerned from opening investment accounts with the LC or its affiliates in future.<\/li>\n<\/ol>\n

        If the client is uncontactable, suspend the account, keep attempting contact and safeguard assets until closure (FAQ 1). If a closure deadline is missed, notify the SFC with the reasons — handled case by case (FAQ 2).<\/p>\n

        Scope of this answer<\/h2>\n

        This piece covers the Circular 26EC29 internal-review baseline for questionable or forged account-opening documents, which accounts to close, and the additional Appendix B measures for Chinese Mainland individual investors. It is not a full rebuild of every acceptable account-opening approach, nor a guide to cross-border correspondent-relationship monitoring also flagged in the same circular.<\/p>\n","protected":false},"excerpt":{"rendered":"

        All licensed corporations (Appendix A) Chinese Mainland … \u95b1\u8b80\u5168\u6587<\/p>\n","protected":false},"author":0,"featured_media":0,"template":"","class_list":["post-750","insight","type-insight","status-publish","hentry"],"_links":{"self":[{"href":"https:\/\/llawsw.com\/zh-hant\/wp-json\/wp\/v2\/insight\/750","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/llawsw.com\/zh-hant\/wp-json\/wp\/v2\/insight"}],"about":[{"href":"https:\/\/llawsw.com\/zh-hant\/wp-json\/wp\/v2\/types\/insight"}],"version-history":[{"count":5,"href":"https:\/\/llawsw.com\/zh-hant\/wp-json\/wp\/v2\/insight\/750\/revisions"}],"predecessor-version":[{"id":1140,"href":"https:\/\/llawsw.com\/zh-hant\/wp-json\/wp\/v2\/insight\/750\/revisions\/1140"}],"wp:attachment":[{"href":"https:\/\/llawsw.com\/zh-hant\/wp-json\/wp\/v2\/media?parent=750"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}