Mainland lenders have clamped down on remittances by citizens to brokerages in Hong Kong, according to a state media report yesterday, and some local companies say they have felt the pinch.
In the latest effort to stem capital from flowing illegally into the Hong Kong stock market, mainland lenders reportedly are turning down customers who attempt to transfer money to local securities firms.
The report quoted a Chengdu investor who said a mainland lender refused to process her payment to a Hong Kong brokerage firm. She later succeeded in transferring the money at another lender.
'Such remittances have long been restricted,' said a Bank of Beijing official. 'Some lenders just do it quietly. It's possible that the central government is imposing tighter rules after the 'through-train' programme was halted.'
Beijing announced the so-called through-train plan, which would have allowed retail investors to buy Hong Kong equities directly, on August 20. But the scheme was put on hold last month after Premier Wen Jiabao said the government needed more time to assess the risks arising from the programme.
'Basically, we need customers to submit proof for remittance purposes,' the bank official said. 'It is stated by the regulator that money transfer into Hong Kong bank accounts would be allowed only for leisure activities such as shopping.'
Lenders from southern regions, such as Shenzhen and Chengdu, which are closer to Hong Kong, might have looser requirements, the Bank of Beijing official added. 'Supervision here in Beijing is generally much higher.'
