Hong Kong brokerage Guotai Junan prepares for launch of investor identification for Northbound trading under Stock Connect

Maria Nikolova

Upon the launch of the NB Investor ID Model, Guotai Junan is required to assign a unique Broker-to-Client Assigned Number to each of its Northbound trading clients and provide Client Identification Data to the Stock Exchange of Hong Kong on or before the prescribed T-1 day.

Hong Kong-based online trading company Guotai Junan International Hold. Limited (HKG:1788) has sought to prepare its clients about the new requirements it faces with regard to the launch of investor identification for Northbound trading under Stock Connect.

In a notice on its website, the brokerage says that, upon the launch of the NB Investor ID Model, Guotai Junan Securities (Hong Kong) Limited is required to assign a unique Broker-to-Client Assigned Number (BCAN) to each of its Northbound trading clients and provide Client Identification Data (CID) to the Stock Exchange of Hong Kong on or before the prescribed T-1 day. After such information has passed the relevant validation check, the client will be allowed to place NB orders on T day.

The brokerage advises investors to complete, sign and return the “PERSONAL INFORMATION COLLECTION STATEMENT (for Individual / Joint Account)” or “PERSONAL INFORMATION COLLECTION STATEMENT (for Corporate /Institutional Account)” on or before September 13, 2018, as a written consent to provide personal data under Stock Connect in accordance with the Statement. Otherwise, the clients will not be allowed to place buy orders on T day, and the company would only be able to execute sell orders of their existing stocks holding under Stock Connect from September 17, 2018.

Last week, the Hong Kong Exchanges and Clearing Limited (HKEX) unveiled the launch details of the investor identification model for Northbound trading (NB Investor ID Model) through its mutual stock market access program with the exchanges in Shanghai and Shenzhen (Stock Connect). The HKEX announcement was released after market regulators said the model will be launched on September 17, 2018.

Under the NB Investor ID Model, Exchange Participants (EPs) that offer Northbound trading services are required to assign a unique number in a standard format, known as the Broker-to-Client Assigned Number (BCAN), to each of their Northbound trading clients. They also have to provide Client Identification Data (CID) to HKEX, which will forward the information to Mainland exchanges. BCANs and CID – the two main components of the NB Investor Model – are for regulators’ market surveillance only, HKEX notes.

Under the current Stock Connect arrangement between Hong Kong and the Mainland exchanges, regulators enquire EPs about an investor’s identity when necessary. Implementation of the NB Investor ID Model is anticipated to lead to more efficient Hong Kong-Mainland cross-border market surveillance.

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