On 30 September 2026, the SFC issued a circular outlining the roadmap and obligations for implementing the Hong Kong Investor Identification Regime for Exchange-traded Derivatives Market ("HKIDR-DM"), scheduled for Q2 2028. The regime requires Relevant Regulated Intermediaries to assign BCANs, collect client identification data, enhance order management systems, and submit mapping files to HKEX.
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Introduction
On September 30, 2026, the Securities and Futures Commission ("SFC") issued a circular to intermediaries setting out the implementation roadmap for the investor identification regime at the trading level applicable to Hong Kong's exchange-traded derivatives market ("HKIDR-DM"). This circular follows the SFC's Consultation Paper dated 22 September 2025 and its Conclusions Paper published on 23 June 2026. Upon implementation, all relevant licensed corporations ("LCs") and registered institutions ("RIs"), collectively referred to as Relevant Regulated Intermediaries or RRIs, will be bound by the obligations set forth under HKIDR-DM.
Core Obligations Under HKIDR-DM
The substantive requirements of HKIDR-DM are substantially aligned with those governing the Hong Kong investor identification regime for the securities market ("HKIDR-S"). In particular, RRIs will be required to: (a) assign a unique Broker-to-Client Assigned Number ("BCAN")—defined as a unique numeric identifier allocated by each RRI to its Relevant Clients—to every Relevant Client who has placed or intends to place orders for futures contracts, options contracts, and stock options (collectively, Futures and Options Contracts) on the Hong Kong Futures Exchange Limited ("HKFE") trading system via their trading accounts with the relevant RRI; (b) collect up-to-date client identification data ("CID"), comprising identity document information obtained from each Relevant Client, and submit such CID together with the corresponding BCAN in a 'BCAN-CID Mapping File' to the central data repository maintained by Hong Kong Exchanges and Clearing Limited ("HKEX") within prescribed timeframes; (c) ensure that the client's BCAN is embedded in the order information for every order transmitted to the HKFE Trading System; and (d) implement robust data privacy and security measures, including obtaining express consent from individual Relevant Clients for the collection and processing of personal data in accordance with applicable data protection legislation.
Implementation Timeline and Preparatory Requirements
Subject to market readiness and satisfactory completion of requisite system testing and market rehearsals, HKIDR-DM is currently scheduled for implementation in Q2 2028. Prior to commencement, RRIs are expected to complete the following preparatory tasks within the indicated timeframes: (1) obtaining appropriate client consent from Q3 2026 to Q4 2027; (2) updating CID for both individual and corporate clients from Q3 2026 to Q4 2027; (3) enhancing order management systems in tandem with preparations for the rollout of HKEX's Orion Derivatives Platform ("ODP"), from Q3 2026 to Q3 2027; (4) assigning BCANs to Relevant Clients during Q3–Q4 2027; (5) preparing BCAN-CID Mapping Files during Q3–Q4 2027; (6) participating in end-to-end testing and market rehearsals for HKIDR-DM during Q3–Q4 2027; (7) submitting BCAN-CID Mapping Files to HKEX's data repository from Q4 2027 to Q1 2028; and (8) formal launch of the regime in Q2 2028.
Client Consent and Data Privacy Compliance
RRIs are required to obtain written or other express consent from Relevant Clients who are natural persons for the collection and transfer of their personal data to HKEX and the SFC. Such obligations do not extend to corporate clients, as personal data privacy considerations are inapplicable thereto; accordingly, no separate consent is required for corporates. The scope of consent must encompass all purposes of use specified in the Consent Circular published by the SFC on 30 September 2026.
Notwithstanding the foregoing, RRIs may be relieved from obtaining new express consent where both of the following conditions are satisfied: (a) prior express client consent regarding the use of personal data has already been obtained; and (b) such existing consent expressly covers all purposes of use set out in the SFC's Consent Circular. It is noted that verbatim reproduction of the stated purposes is not mandatory, provided that each purpose is clearly encompassed within the scope of the prior consent.
Consent may be evidenced through a written and signed acknowledgement on paper, by email, via other electronic means (including instant messaging applications), or by telephone, in each case subject to compliance with the procedural measures prescribed in the Consent Circular.
Collection of Client Identification Data
RRIs must ensure that the following CID is collected from Relevant Clients prior to implementation:
(a) For individual clients: full name as appearing on the identity document; issuing country or jurisdiction; type of identity document (subject to a prescribed order of priority, namely: first, Hong Kong Identity Card; second, national identification document; third, passport); and identity document number.
(b) For corporate clients: full name as shown on its identity document; issuing country or jurisdiction; type of identity document (order of priority being: first, Legal Entity Identifier (LEI)—a 20-character alpha-numeric code under the Global LEI System adopted by the Financial Stability Board for uniquely identifying distinct legal entities participating in financial transactions—registration document; second, certificate of incorporation; third, business registration certificate; fourth, other equivalent documents); and identity document number.
(c) For clients that are trusts: CID of the trustee (in the same format as applicable to corporate or individual clients). In respect of investment fund trusts, RRIs must additionally obtain the CID of the asset management company or individual fund holding a trading account at the RRI.
(d) For joint accounts: CID for all named clients under the single BCAN assigned to that account.
RRIs should notify existing derivatives trading account holders of the applicable identity document waterfall and request any required documents in advance of implementation. It is further noted that, given HKEX's Unique Business Identifier ("UBI") was implemented on 27 December 2023, the UBI shall be adopted as the identity document number for certificates of incorporation and business registration certificates.
Order Tagging and Reporting Obligations
Upon implementation, RRIs will be required to tag a BCAN onto each trade order submitted to the HKFE Trading System and to submit BCAN-CID Mapping Files together with other prescribed reporting files. In the interim period extending through Q3 2027, RRIs should undertake all necessary system enhancements to enable both the tagging of BCANs on trade orders and the submission of BCAN-CID Mapping Files via HKEX's Electronic Communication Platform ("ECP") in compliance with HKIDR-DM requirements.
BCAN Structure and Assignment Protocol
Each RRI bears sole responsibility for assigning a unique set of BCANs to its Relevant Clients, including where the RRI conducts Type 1 and/or Type 2 regulated activities on a proprietary basis. A BCAN comprises the RRI's six-character Central Entity Number (CE Number) as assigned by the SFC, followed by a separator dot ('.'), and further followed by a unique numeric identifier of no more than ten digits. The CE Number prefix must be rendered in capital letters to facilitate differentiation among BCANs issued by different RRIs.
RRIs are permitted to adopt for HKIDR-DM purposes the same BCAN previously assigned under either HKIDR-S or the investor identification regime governing northbound trading under Mainland-Hong Kong Stock Connect. Where a distinct BCAN is utilized, it must be unique and shall not duplicate any existing BCANs registered under either of those regimes. A BCAN may also incorporate an RRI's internal client identifier or account number, provided that such incorporation complies with the requirements set out in HKEX's Information Paper.
Submission of BCAN-CID Mapping Files
The BCAN-CID Mapping File—defined as a file containing the BCAN and CID of all Relevant Clients of an RRI in the format prescribed by HKEX—must be prepared and submitted to HKEX's central data repository prior to implementation. In the event of any update, including new client on-boarding, account closure, or change in CID, RRIs are required to upload a complete file reflecting the CID of all Relevant Clients on the date such update occurs.
Submission may be effected through either: (a) HKEX's designated web portal, namely ECP; or (b) another LC or RI via the SFC's WINGS platform, in which case data must be encrypted in accordance with HKEX requirements. RRIs are further obligated to ensure that individual client information remains accurate and current, to promptly notify HKEX of any changes, to implement internal measures requiring clients to report CID updates without undue delay, and may conduct periodic reviews of client information while observing the regular review obligations under the AML/CFT Guideline.
Testing, Market Rehearsals, and Implementation Readiness
RRIs are expected to participate in end-to-end testing and market rehearsals covering both BCAN-CID Mapping File submissions via ECP and BCAN tagging of trade orders prior to implementation. The SFC and HKEX will coordinate these activities, with further operational details to be announced at the appropriate time.
Regulatory Support and Contact Information
To facilitate a smooth transition, the SFC has indicated that it will collaborate with HKEX to promote investor awareness of consent requirements and to organise training sessions commencing in Q4 2026. Market participants are encouraged to attend such sessions.
Inquiries regarding substantive aspects of HKIDR-DM should be directed to:
It is noted that the tasks enumerated in the circular are not exhaustive. RRIs are advised to refer comprehensively to all relevant SFC and HKEX guidance materials available on their respective webpages for a complete understanding of their obligations under this regime.
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