Dormant Account Review for Mainland Investors Commences in Hong Kong

A targeted review of specific bank accounts is now underway at licensed financial institutions across Hong Kong. Driven by a joint circular issued in May by the Hong Kong Monetary Authority and the Securities and Futures Commission, firms like HSBC Hong Kong have begun examining investment accounts held by mainland Chinese investors that meet certain dormancy criteria.

Which Accounts Are Under Scrutiny?

The review focuses on "dormant accounts." These are defined as accounts with a zero balance as of May 22, 2026, and which have recorded no client-initiated transactions over the preceding 12 months. In essence, these are long-inactive accounts holding no funds. Actively traded accounts are not affected by this exercise.

Banks have set internal timelines for compliance. Some required clients to submit documentation or suspend services by August 20. Accounts that fail to complete the required process by September 12 risk having their investment services terminated. Accounts that remain non-compliant will be dealt with according to regulatory requirements.

The Reactivation Key: Source of Funds Declaration

If your account is classified as dormant and you wish to reactivate it, the central requirement is to sign a written declaration regarding the source of your funds. In this document, the client must self-certify that funds used for investment in the account originate entirely from lawful channels outside mainland China.

A critical point to understand is that banks are not conducting substantive verification or tracing of the funds mentioned in the declaration. This document is fundamentally a self-declaration by the client, who bears full legal responsibility for its truthfulness and accuracy. The financial institution's role is to collect and retain this declaration for potential future regulatory review.

Important Considerations and Context

  • No Reactivation Possible: Accounts found to have been opened using suspicious or forged documents will be closed directly, with no opportunity for reactivation.
  • Policy Nature: This action represents the enforcement of an existing regulatory circular, not a new policy announcement. Specific timelines may vary between banks, and clients should follow the formal notices issued by their own institutions.

For mainland investors with Hong Kong investment accounts, checking for bank notifications, verifying account status, and acting on any requirements is the best course to avoid service disruption.