- EPs must assign a unique number to each of their Northbound trading clients and provide Client Identification Data to HKEX
- HKEX will facilitate market readiness and compliance by providing a secure file transfer protocol service for EPs to submit the required information from 27 August
Hong Kong Exchanges and Clearing Limited (HKEX) today (Friday) announced the launch details of the investor identification model for Northbound trading (NB Investor ID Model) through its mutual stock market access programme with the exchanges in Shanghai and Shenzhen (Stock Connect) after market regulators said the model will be launched on 17 September 2018 (Monday).
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 and 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.
To facilitate a smooth rollout of the NB Investor ID Model, HKEX will commence the secure file transfer protocol service for EPs on 27 August 2018 (Monday). That will give EPs ample time to register BCANs and CIDs of their NB trading clients before the launch date of NB Investor ID Model.
HKEX has been working closely with market participants in the past year through various briefing sessions, seminars and discussion forums to explain the NB Investor ID Model. HKEX has also arranged several rounds of testing sessions and market rehearsals to help EPs to prepare themselves both technically and operationally to meet the new regulatory requirements.
Under the current Stock Connect arrangement between Hong Kong and the Mainland exchanges, regulators enquire EPs about an investor’s identity as and when necessary. Implementation of the NB Investor ID Model will result in more efficient Hong Kong-Mainland cross-border market surveillance.
HKEX has prepared a wide range of materials on the NB Investor ID Model to help market participants, including an Information Paper, Frequently Asked Questions and technical documents. For details, please refer to the NB Investor ID Model information in the Mutual Market section of the HKEX website.