Regulatory Alerts2019-06-21
Added · Updated
Currency Conversion Arrangement Involving Onshore RMB under Northbound Stock Connect
The Hong Kong Monetary Authority issued guidance to Hong Kong Settlement Banks regarding the provision of currency conversion services for Northbound Stock Connect investments. The document mandates that banks ensure transactions arise from genuine investment needs and implement closed-loop fund flows with aggregate-level monitoring to match conversion amounts with settlement data. Banks are required to maintain proper internal controls, keep records for ex post monitoring, and submit quarterly tallies of conversion and hedging activities to the regulator.
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