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]



Ant, Squashed

Not even Jack Ma is bigger than the Chinese Communist Party.


Jack Ma’s Bribe To Chinese Regulators Didn’t Work

They’re not saying they won’t take some or all of Ant Group eventually, just not in exchange for not cancelling its IPO.

Getty Images

HSBC CEO Would Rather Answer Awkward Questions From British Members Of Parliament Than Chinese Bureaucrats

But Noel Quinn’s not a political man so he’d rather not get in to the obvious implications of that choice.

Ray Dalio (Getty Images)

Ray Dalio Thinks Jack Ma Got What Was Coming To Him

If he’d just do what they want, he’d find China’s market regulators to be very reasonable and caring people.

Hong Kong Picks Awkward Time To Make Its IPOs More Like Ours

At a time when U.S. exchanges seem to have lost the capacity to competently manage an initial public offering, one might expect Hong Kong's securities honchos to sense an opening. They have apparently gotten a different message.

Photo: Getty Images.

Credit Suisse Traders Exactly Half As Valuable To Bank As Wealth Managers

The Swiss have, as is their wont, precisely quantified the investment bank’s status.