C. FAQs on collection of client identification data

Q1 :
For the purposes of obtaining CID of a natural person client under paragraph 5.6(o)(i) of the Code of Conduct, are the following identification documents regarded as national identification documents or passports – (1) Exit-entry Permit for Travelling to and from Hong Kong and Macao (往來港澳通行證, 或俗稱雙程證）; (2) HKSAR Document of Identity for Visa Purposes (香港特別行政區簽證身份書); and (3) Permit for Proceeding to Hong Kong and Macao (前往港澳通行證, 或俗稱單程證）? If not, are RRIs required to update CID for clients who have used these documents for account opening?

For an individual client, the identity document type should be provided in the order of priority of (1) Hong Kong Identity Card; (2) national identity document; (3) passport.

We understand that Exit-entry Permit for Travelling to and from Hong Kong and Macao and Permit for Proceeding to Hong Kong and Macao are travelling documents issued by the Mainland authorities to PRC residents. They are neither national identity documents nor passports. PRC residents without Hong Kong Identity Card should provide information on their mainland identity cards (national identity document) as their CID, or in the absence of a mainland identity cards, the information on their passports.

We understand that HKSAR Document of Identity for Visa Purposes is a travelling document issued by the Hong Kong authorities to Hong Kong residents who should possess Hong Kong Identity Cards under general circumstances. Following the above waterfall, Hong Kong residents should provide information on their Hong Kong Identity Cards as CID.

If the existing client information is not in compliance with the waterfall requirements under the HKIDR, RRIs are required to update CID for these clients and prepare the BCAN-CID Mapping File accordingly before the implementation of the HKIDR.

For details of the types of information constituting the CID of a client, please refer to paragraph 41 of the Consultation Paper and paragraph 5.6(n) and (o) of the Code of Conduct.

Q2 :
Should an RRI submit a client’s expired passport information as the client’s CID in the BCAN-CID Mapping File before the RRI obtains the CID of the new passport?

Under paragraph 5.6(k) of the Code of Conduct, RRIs should take all reasonable steps to establish that the BCAN and CID it submits to SEHK are accurate and kept up-to-date. It should also put in place measures to require clients to notify it of any updates to their CID.

If an RRI has actual notice of a change to a client’s CID (e.g. an expired passport), it should update the client’s CID and submit an up-to-date BCAN-CID Mapping File to SEHK’s data repository as soon as practicable, rather than only when the client’s next trade is executed (e.g. by notifying the client of the CID requirements under the HKIDR and requesting the client to update its CID).

Q3 : Is it a mandatory requirement for an RRI to follow the waterfall requirements set out in the consultation paper for collecting the client’s CID?

A: Yes, it is a mandatory requirement for an RRI to follow the waterfall requirements set out in paragraph 41 of the Consultation Paper for collecting the client’s CID. The relevant requirements are set out in paragraph 5.6(o) of the Code of Conduct.

Q4 : What is an RRI expected to do if a client fails or refuses to provide CID in accordance with the waterfall under paragraph 5.6(o) of the Code of Conduct? Are there any consequences to the RRI if it submits CID that is not in accordance with the waterfall set out in paragraph 5.6(o) of the Code of Conduct?

A: Under paragraph 5.6(c) of the Code of Conduct, RRIs should collect the CID of each client to whom it has assigned a BCAN. The CID should be collected in accordance with the waterfall set out under paragraph 5.6(o) of the Code of Conduct. If the client fails or refuses to provide the CID, the RRI should only effect sell orders or trades in respect of existing holdings of a listed security, or transfers of shares out of or withdrawals of physical certificates from the account (but not buy orders or trades, or transfers of shares or deposits of physical certificates into the account) for that client.

In addition, RRIs should determine reasonable measures to be taken to satisfy their obligations under paragraph 5.6(k) of the Code of Conduct. These may include obtaining representations and warranties from their clients as they consider appropriate to assist their verification and maintenance of the CID.

Accordingly, if an RRI could not establish that the CID to be submitted is accurate (e.g. the CID of the client is not in accordance with the waterfall) after the RRI has taken all such reasonable steps, the RRI should not submit BCAN or CID of that client to SEHK and/or the SFC under the HKIDR and OTCR, and should only effect sell orders or trades in respect of existing holdings of a listed security or transfers of shares out of or withdrawals of physical certificates from the account (but not buy orders or trades, or transfers of shares or deposits of physical certificates into the account) for that client.

It also follows that, if an RRI has taken all such reasonable steps to establish that the CID to be submitted is accurate (e.g. the CID of the client is believed to be in accordance with the waterfall), the RRI may not be regarded as in breach of the relevant requirements under paragraphs 5.6(o) of the Code of Conduct if, without the RRI’s actual notice, the client holds an identity document that is of a higher priority in the waterfall. In considering whether there is a breach of the Code of Conduct by the RRI, the SFC will take into account all the relevant facts and circumstances of the case.

Q5 :
If a Relevant Client of an RRI does not hold a Hong Kong identity card and is not from a Chinese- or English-speaking country where Chinese/English name may not be contained in the national identification document, for the purpose of preparing the BCAN-CID Mapping File and reporting under the OTCR, does the RRI need to input the information in the same language as that in the national identification document?

In view of the difficulties that may be faced by the RRIs to accurately input the client’s name in a language other than Chinese and English due to system limitations, the SFC provides further guidance to help the RRIs to cope with the language input issue while ensuring that the market surveillance needs of the SFC are met.

The general principle is that the input of a client’s name should only be made in Chinese characters (in traditional or simplified characters which are exactly the same as those in the identification document) and/or the English alphabet of 26 letters with no diacritics, accents or symbols added to the letters. If both Chinese and English names are shown in the identification document, both Chinese and English names should be inputted.

If the national identification document does not have the client’s name fully expressed in Chinese characters or the English alphabet of 26 letters, the RRI should obtain a copy of the client’s passport and input the client’s name that is available in the English alphabet in the passport. Please take special note that in this situation, apart from the client name, all other information such as identity document type and number continue to follow that of the national identification document.

For the avoidance of doubt, Chinese characters refer to the characters that exist in the Chinese language input system. In other words, a Japanese Kanji or Korean Hanja that exists in the Chinese language input system is considered a Chinese character but a character that only exists in the Japanese/Korean input systems is not considered a Chinese character.

Some scenarios are set out below for better illustration. In all the scenarios, the Relevant Client does not have a Hong Kong identity card.

Scenario 1:

The Relevant Client holds a national identification document in an English-speaking country, or holds a Resident Identity Card in mainland China:

- input the client’s English and/or Chinese name in the national identification document, e.g. James O’Neill/陈大文.

Scenario 2:

The Relevant Client holds a national identification document in Bahasa Indonesia (which is not English but is a national language written in exactly the same 26 letters as in the English alphabet):

- input the client’s name in the national identification document, e.g. Nurul Arifin.

Scenario 3:

The Relevant Client holds a French national identification document. Her name in the French national identification document happens not to contain any diacritics, accents, symbols or non-English letters (e.g. Camille Dupont):

- input the client’s name in the national identification document, i.e. Camille Dupont.

Scenario 4:

The Relevant Client holds a French national identification document. Some parts of her name in the French national identification document contain diacritics, accents, symbols or non-English letters (e.g. Chloé Blanchet):

- input the client’s English name as appeared in the passport, i.e. Chloe Blanchet. Input the other information such as document type and number as of the national identification document. The RRI needs to obtain copies of both the client’s national identification document and passport.

Scenario 5:

The Relevant Client holds a national identification document which shows his name in a language that does not consist of Chinese characters or English alphabet (e.g. ???? ?????):

- input the client’s English name as appeared in the passport, i.e. Mohammad Abadi. Input the other information such as document type and number as of the national identification document. The RRI needs to obtain copies of both the client’s national identification document and passport.

Scenario 6:

The Relevant Client holds a Japanese or Korean national identification document which bears his name fully expressed in Chinese characters (e.g. 铃木阳太 or 金民浩):

- input the client’s name in the national identification document, i.e. 铃木阳太/金民浩.

Scenario 7:

The Relevant Client holds a Japanese or Korean national identification document in which his name is not fully expressed in Chinese characters (e.g. 铃木ようた or ???):

- input the client’s English name as appeared in the passport, i.e. Suzuki Yota/Kim Min Ho. Input the other information such as document type and number as of the national identification document. The RRI needs to obtain copies of both the client’s national identification document and passport.

Last update: 28 Jan 2022