On 30 November 2017 the Hong Kong Securities and Futures Commission (“SFC”) announced that an agreement has been reached with China Securities Regulatory Commission (“CSRC”) on proposals to introduce an investor identification model for Northbound trading under the Mainland – Hong Kong Stock Connect[1] (“Investor ID Model”).  Hong Kong Exchange and Clearing Limited (“HKEX”) also published an Information Paper, a circular, a FAQ and had arranged a Briefing to Participants on Northbound Investor ID Model.

In the SFC announcement, it was expressed that the Investor ID Model is critical to safeguard market integrity and to strengthen the protection of investors in both markets, and that the SFC also aims to implement an investor identification regime to cover all trading on the SEHK in the longer term.

This Legal Update is intended to shed some light on the key features of Investor ID Model with a particular focus on its implications on asset management companies:

For more operational details of the Investor ID Model please refer to HKEX’s Information Paper and FAQ. [1] Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, both provide for mutual stock market access between Hong Kong and the Mainland.

 [1] Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, both provide for mutual stock market access between Hong Kong and the Mainland.