Hong Kong Securities and Futures Professionals Association President: Virtual Asset Regulatory Approach Should Not Be Applied to Traditional Securities Industry

Odaily According to Chen Zhihua, President of the Hong Kong Securities and Futures Professionals Association, regarding the controversy over brokers' clients "pre-registering designated bank accounts," although the regulatory circular proposed establishing a bank account registration mechanism with caps, this approach may stem from inappropriately applying virtual asset regulatory thinking (such as pre-approval of wallet addresses) to the traditional securities industry. Chen Zhihua pointed out that for virtual assets, due to the difficulty in instantly verifying ownership of blockchain addresses, pre-approval has technical rationality. However, for traditional securities, fund flows can already be confirmed through mechanisms like "same-name account verification," making a one-size-fits-all restriction on the number of accounts unnecessary. Comparing it to the EU's anti-money laundering framework, the regulatory focus should be on piercing through beneficial ownership and identifying abnormal transactions, rather than imposing upfront account restrictions. He also suggested that regulators adhere to the "risk-based" principle, focus on abnormal fund flows (such as "layering transactions"), clarify compliance standards for same-name accounts, and promote the application of big data and AI in anti-money laundering monitoring. (Orange News)