Guidance on online client onboarding

On 12 July 2018 the SFC issued a circular to provide guidance to intermediaries which intend to onboard individual clients online in response to enquiries raised by the industry.

Onboarding a client who is not physically present poses a higher risk of impersonation. 

Intermediaries are allowed to use certification services that are recognised by the Electronic Transaction Ordinance for client identity verification in an online environment. In order to provide more flexibility, the SFC will also accept the following procedures to verify clients’ identities when onboarding individual clients online:

1. Obtain a client agreement which is signed by a client by way of an electronic signature together with a copy of the client’s identity document;
2. Successfully transfer an initial deposit of not less than HK$10,000 from a bank account in the client’s name maintained with a licensed bank in Hong Kong (Designated Bank Account) to the intermediary’s bank account;
3. Conduct all future deposits and withdrawals for the client’s trading account through the Designated Bank Account(s) only; and
4. Maintain proper records of the account opening process for each client which are readily accessible for compliance checking and audit purposes.

Intermediaries when onboarding overseas clients should be mindful of the requirements imposed by the domestic regulatory authorities.

The SFC may provide further guidance in the light of technological developments in the future.