Banks are expected to be on the lookout for a lot of things their customers shouldn’t be doing, at least not through their bank accounts. Money laundering, for example, or bilking sovereign wealth funds of billions of dollars, or serving sellers of that evil and still very-much-illegal-on-the-federal-level weed, uh, weed. Now, they’ve got to keep an eye out for an equally sinister and immoral action: supporting democracy.
Bankers at Credit Suisse Group AG, HSBC Holdings Plc, Julius Baer Gruppe AG and UBS Group AG, among others, are broadening scrutiny under their programs that screen clients for political and government ties and subjecting them to additional diligence requirements, these people said.
The designation, called politically exposed persons, can make it more difficult or altogether prevent people from accessing banking services, depending on what the bank finds about the person’s source of wealth or financial transactions.
So, how are you supposed to avoid falling afoul of Hong Kong’s “security law”? Why, whole new levels of due diligence.
The checks at some wealth managers have involved combing through comments made by clients and their associates in public and in media, and social media posts in the recent past, these people said…. One banker at a global wealth manager that holds more than $200 billion in assets said the audit of its clients could go back as far as 2014 in some cases to gauge a client’s political stance since Hong Kong’s 2014 pro-democracy “umbrella” movement.
Of course, with banking’s perfect amoral clarity, there’s something almost as bad as being in favor of democracy in Asia’s leading financial center, and that’s being opposed to democracy there.
The sources, who requested anonymity because of the sensitivity of the situation, said the broadened scrutiny of clients also applied to Hong Kong and Chinese officials who had implemented the law in anticipation of any U.S. sanctions against them.
In any event, Jack Ma doesn’t care, and really, why should he?
Billionaire Jack Ma’s Ant Group is seeking a valuation north of $200 billion as it goes public in Hong Kong and Shanghai, people familiar with the matter said, kicking off a much-anticipated market debut for China’s leader in internet finance…. If conditions are favorable, it could seek to raise more in its IPOs than Saudi Aramco’s record $29 billion haul, one of the people said, asking not to be identified talking about a private deal.
Global banks scrutinize their Hong Kong clients for pro-democracy ties [Reuters]
Jack Ma’s Ant Seeks $200 Billion Value in Landmark Dual IPO [Bloomberg]