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HK regulator urges banks to ease rules on startup account openings
[HONG KONG] Hong Kong's banking regulator on Thursday urged financial firms to review requirements that have made it virtually impossible for startups and small companies to open bank accounts in the city.
Opening bank accounts has been one of the key issues holding back the development of financial technology (fintech) companies in Hong Kong as it competes with Singapore, Australia and China to lure investments in the sector.
The Hong Kong Monetary Authority (HKMA) on Tuesday also launched a regulatory regime known as a "sandbox" for innovation in the banking sector, amid fears the city is losing ground to other markets.
The measures aren't aimed at helping facilitate the account openings of fintech companies specifically, HKMA deputy chief executive officer Arthur Yuen told a news conference, but to "make sure banks do not lean against anyone in particular."
In a circular to banks, the regulator said robust measures to combat money laundering and terrorist financing were important, but it expected banks to "refrain from adopting practices that would result in financial exclusion."
Some 20 banks out of the more than 150 under the HKMA's supervision have volunteered to be put on a list welcoming accounts from startups and small-and-medium enterprises (SMEs).
Mr Yuen didn't disclose the list of "startup friendly banks", but said HSBC and Standard Chartered were not on the list.
"We welcome the announcement of the HKMA's guidelines on account opening for businesses in Hong Kong and will study these further. We share the Authority's commitment to ensuring that SMEs in Hong Kong have ready access to banking services," a spokesman for HSBC in Hong Kong said in a statement.
StanChart didn't immediately reply to a Reuters request for comment on why it didn't join the list.
Both banks have received billions of dollars in fines from regulators overseas for anti-money laundering lapses.