Key Updates: FAQ on Bank Account Opening for Virtual Assets Service Providers (VASPs) and Digital Assets Related Companies
Banks in Hong Kong are required to undertake customer due diligence (CDD) measures and on-going monitoring for existing and on-boarding new customers in accordance with the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap 615) (AMLO) and the Guideline on Anti-Money Laundering and Counter-Financing of Terrorism (For Authorized Institutions) (AML/CFT Guideline).
Apart from local requirements, some banks need to also comply with the requirements or standards mandated by their head offices or overseas authorities.
This FAQ aims to provide some useful information and tips for VASPs and Digital Assets related companies looking to open a bank account in Hong Kong.
Q1) Can SFC-licensed VASPs open bank accounts in Hong Kong? 2) What about for companies that are in the process of applying for a VASP licence from the SFC?
A: There are no legal or regulatory requirements which prohibit banks operating in Hong Kong from offering banking services to VASPs.
Where a VASP only seeks to open bank accounts for operating purpose (e.g. rental and payroll), whether or not a formal licence has been granted, banks generally follow the same account opening procedures as for ordinary corporate accounts in assessing the account applications.
Under the new regulatory framework in Hong Kong with effect from 1 June 2023, the HKMA expects that banks operating in Hong Kong should endeavour to meet the legitimate business need of SFC-licensed VASPs (or applicants which obtained approval-in-principle from the SFC) for segregated bank accounts for maintaining clients’ funds.
Q3) What are the additional CDD measures for VASPs opening the clients’ accounts?
A: Under the new regulatory framework in Hong Kong with effect from 1 June 2023, the HKMA expects that banks operating in Hong Kong should endeavour to meet the legitimate business need of SFC-licensed VASPs (or applicants which obtained approval-in-principle from the SFC) for segregated bank accounts for maintaining clients’ funds.
The HKMA’s regulatory requirements for conducting additional CDD measures for VASPs seeking to open segregated clients’ accounts only apply to overseas VASPs, but not to a SFC-licensed VASP. The HKMA has clarified such requirements in its communication with banks.
Q4) Can banks open accounts with other non-VASP, digital assets-related companies (e.g. those providing decentralized trading platforms, custodian services, security tokens, prime brokers, market makers)?
A: As a general principle, the HKMA does not provide specific guidance on how CDD measures should be conducted on customers from each and every business sector. The HKMA has reminded banks from time to time of the importance of applying a risk-based approach and not adopt “one-size-fits-all” approach in their account opening process.
Q5) Where can I find the contact information of banks for enquiry of corporate bank account opening related matters?
A: With a view to further enhancing the transparency and communication among banks and VASPs, the HKMA has coordinated a list of contact information of retail banks and virtual banks for VASPs to enquire account opening related matters with the banks.
Please reach out to InvestHK Fintech team via firstname.lastname@example.org for a referral or connection.
Q6) In case a VASP operator/applicant faces major obstacle with their account opening with a bank, where can they go for help?
A: All retail banks in Hong Kong have established review mechanisms to re-examine unsuccessful applications of bank accounts. Bank account applicants may make use of the banks’ mechanisms to request the banks concerned to review their cases. Some customers have been able to open accounts after providing supplementary information for banks’ further assessment, while those who refused to provide the additional information requested were unable to open bank accounts but banks generally provided the reasons for rejection where permissible.
Furthermore, the HKMA has set up a dedicated hotline to handle enquiries from the public and business community, including VASPs, regarding bank account opening and maintenance matters.
Telephone: (852) 2878 1133