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HSBC cites regulations as protest-linked account reportedly shut
[HONG KONG] HSBC Holdings pointed to routine regulatory requirements it ensure client money is used for stated purposes after a report on Monday that the firm is shutting a corporate account that helped fund protest-related activities in Hong Kong - a politically sensitive issue.
The bank took action after finding the account was being used inconsistently with its original paperwork, the Hong Kong Economic Journal said. The firm informed the client last month that it will close the account after a 30-day notice period that ends this week, according to the report, which didn't identify who opened it.
"As part of our responsibility to know our customers and safeguard the financial industry, we regularly review our customers' accounts," Vinh Tran, a spokeswoman for the bank in Hong Kong, said in an email statement that didn't elaborate on the account at issue. "If we spot activity differing from the stated purpose of the account, or missing information, we will proactively review all activity, which can also result in account closure."
Hong Kong's polarizing protests have created headaches for companies including Apple and Activision Blizzard that have come under heavy political pressure to cut any perceived ties with the city's pro-democracy movement - only to later face public backlash. In pointing to well-established banking regulations, HSBC may show it had no discretion in the account's closing and that it isn't because of politics.
Another organization, 612 Humanitarian Relief Fund, which helps protesters pay medical expenses and legal fees, said Monday on Facebook that its HSBC account is running normally.
Banks are required to "effectively assess risk" regarding account activity, ensuring the consistency of their stated purpose and source of funding, the Hong Kong Monetary Authority said in a separate statement on Monday.