Exclusive | Tighter scrutiny of potential mainland clients by banks in Hong Kong

International wealth managers in Hong Kong, especially private banks from Switzerland, are tightening their background checks on potential mainland clients, particularly those with important political ties.

The moves have prevented a number of wealthy mainlanders from opening offshore accounts in Hong Kong, people in the financial industry familiar with the situation told the

Hugo Williamson, managing director of Risk Resolution Group, a British risk consultancy, said anti-money-laundering and "know your client" regulations had become stricter in Hong Kong.

"It is fairly common knowledge within the banking sector that more stringent compliance measures are being used for mainland Chinese investors, falling under the 'know your client' initiatives, but specifically looking for 'politically exposed persons'," Williamson said.

Many wealthy Chinese clients open accounts with Swiss banks to take advantage of the country's reputation for bank secrecy.

A relative of a member of the Chinese People's Political Consultative Conference - the mainland's top political advisory body - recently withdrew an application to open an account in Hong Kong with Lombard Odier after being required by the bank's compliance officers to provide additional information about income sources and political ties, according to a source with knowledge of the matter.

An e-mail sent by the to the bank's Geneva headquarters requesting comment went unanswered.