Like Tree10Likes

Information required by HSBC

Closed Thread
Page 1 of 2 1 2 LastLast
  1. #1

    Join Date
    Dec 2013
    Location
    Hong Kong
    Posts
    12,323

    Information required by HSBC

    Another one of those "company" information requests from the bank re our corporate bank account.

    But this time, they are asking a huge number of intrusive questions about the PERSONAL wealth of our companies shareholders. (ie me and my fellow shareholders).

    Thinks like "what is your personal wealth" and "how did you get it".

    Does anyone know why they are asking and what the minimum required answer is? My fellow shareholders are not happy about giving the information, I don't even know the answer (it would take a fair bit to tally up my bank accounts, pensions, shares, property all over the world!) so I suggested some innocuous replies which don't really answer the question.

    So if anyone knows what they really want, it would be really helpful.


  2. #2

    Join Date
    Dec 2002
    Location
    薄扶林
    Posts
    47,965

    Is this labeled as 'Safeguard' in their letters to you?

    https://geoexpat.com/forum/145/thread345919.html


  3. #3

    Join Date
    Jan 2018
    Posts
    831

    Since the beneficiaries of companies are individuals, it makes sense to verify and re-verify sources of income and accounts (for the purpose of Automatic Exchange of Financial Account Information. I think you should seek counsel on the level of information required by countries where you and your shareholders have residence, citizenship and tax residence. You also need to ensure that their backgrounds are legit from an AML perspective too. If you are the Principal of your company, you could be on the hook too.

    jdf21st likes this.

  4. #4

    Join Date
    Mar 2017
    Location
    Hong Kong
    Posts
    923

    Fairly standard checks, especially for unincorporated or private limited companies. For purposes of KYC/AML, the bank will typically want to understand source of funds, beneficial owners, potentially sanctioned individuals, PEPs, etc on an ongoing basis. I would just answer truthfully as HSBC has a fairly low tolerance for BS, especially for BIB accounts.

    shri and jdf21st like this.

  5. #5

    Join Date
    Dec 2002
    Location
    薄扶林
    Posts
    47,965

    Agree with tf19.

    What I'd do is start with basic information which does not involve that much time.

    Personal Wealth: "Approximately blah blah" (should be close to reality)
    Source of Wealth: "Personal Savings, Investments, Inheritance etc" (again, whatever close to reality and can be documented if needed. These three are valid tick marks on their forms. )

    If they don't accept, call the number on their Safeguard letter and ask them what additional information they want. Quite often, they ask for everything on round 1 of safeguard when they really do not need or know what they want.


  6. #6

    Join Date
    Dec 2013
    Location
    Hong Kong
    Posts
    12,323

    Cheers. I couldn't understand why they were asking again. I've dug deeper and realised this is the holding company. Last one was the operating company.


  7. #7

    As others have said, it's now pretty much standard to ask these sorts of questions - regulatory requirements (FATCA among others) mean that the banks are required to know their customers' source of funds. If the banks do not verify the source of funds, then the banks can be penalised even if everything you do is legitimate.

    Also, its not just for new accounts. Banks are also asking existing clients with accounts which were opened before the current laws came into effect to produce updated proof of ID etc.

    FWIW, I got a statement from my last firm setting out my compensation for the last five years before I retired. I've needed it twice.


  8. #8
    Common Reporting Standard (CRS) - Organisation for Economic Co-operation and Development is the latest set of international sharing of information requirements. Banks are looking to cover their backs!!

  9. #9

    BTW, enquiry about SoW and SoF not purely a CRS/FATCA matter - it’s AML/CTF/KYC primarily, eg banks will need (not just want) to know details of anyone with >10% stake if a Cayman entity (CIMA regs), down to UBO level (eg certified proof of ID, address, constitutional dox, etc, depending on type of holder).
    SoW = source of wealth (eg inherited, years of savings, won the lottery - may need proof (eg for latter...))
    SoF = source of funds (eg subscribers to investment vehicle/fund, etc)
    UBO = ultimate beneficial owner (sic)
    As others comment banks (eg HSBC, SCB, Citi, Hang Seng, etc) little appetite for AML/Sanctions risks, etc, little interest in opening accounts for those with something to hide (except perhaps to notify JFIU).

    Experienced investors know the drill by now.

    shri likes this.

  10. #10

    Join Date
    Dec 2013
    Location
    Hong Kong
    Posts
    12,323
    Quote Originally Posted by jdf21st:
    BTW, enquiry about SoW and SoF not purely a CRS/FATCA matter - it’s AML/CTF/KYC primarily, eg banks will need (not just want) to know details of anyone with >10% stake if a Cayman entity (CIMA regs), down to UBO level (eg certified proof of ID, address, constitutional dox, etc, depending on type of holder).
    SoW = source of wealth (eg inherited, years of savings, won the lottery - may need proof (eg for latter...))
    SoF = source of funds (eg subscribers to investment vehicle/fund, etc)
    UBO = ultimate beneficial owner (sic)
    As others comment banks (eg HSBC, SCB, Citi, Hang Seng, etc) little appetite for AML/Sanctions risks, etc, little interest in opening accounts for those with something to hide (except perhaps to notify JFIU).

    Experienced investors know the drill by now.
    We have nothing to hide. It does not take much capital to set up a consulting firm so all of us are just using our savings. What we do have, however, is a FIRM TO RUN. That form took more management time than running the firm for about a week. Huge tax on the business.
    jdf21st likes this.

Closed Thread
Page 1 of 2 1 2 LastLast