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Fictional case for portfolio training only. No real person, company, or jurisdiction. Not a real STR. Not legal advice. Not investment advice.

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Snapshot

Facts (fictional)

• Applicant: Marcus Veld (fictional), national of fictional Jurisdiction Q, applying as a non-resident retail client for a simulated SFC-licensed VATP account.
• PEP status (scenario design): Serving Deputy Minister of Commerce of Jurisdiction Q — a foreign senior government official → treated as a non-Hong Kong politically exposed person under Guideline ¶ 4.11.7(a). No real country or real official is named.
• Stated profile: Diversifying personal savings into VA tokens listed on the licensed platform; expected first-year funding about HKD 1.2 million; no leverage products sought in year one.
• Claimed SOF/SOW: (1) civil-service salary over the past 24 months; (2) proceeds from sale of a residential property in Q’s capital four months earlier.
• Channel: Remote non-face-to-face onboarding; passport + liveness selfie match; address verified via utility bill.
• Screening (fictional): Commercial PEP database clear hit (title + name + DOB match); no sanctions / terrorism / corruption-allegation / unexplained-wealth adverse-media hit.
• Documents initially provided: Passport; proof of address; selfie; PEP self-declaration questionnaire (answered “Yes — Deputy Minister”); 12 months of payslips; 6 months of bank statements showing salary credits; notarised sale-and-purchase agreement plus counsel confirmation that sale proceeds credited to the same bank account.
• EDD: Written SOW/SOF pack; cross-check against Q’s public ministerial biography (title/tenure consistent); senior-management approval pack prepared before account activation.

Regulatory requirement (primary)

Where the FI knows that a customer (or beneficial owner) is a non-Hong Kong PEP, before establishing the relationship it should (Guideline ¶ 4.11.12 / AMLO Sch. 2 as restated in the Guideline):

(a) obtain senior management approval; (b) take reasonable measures to establish the customer’s source of wealth (SOW) and source of funds (SOF); and (c) conduct enhanced ongoing monitoring of the relationship (Chapter 5).

¶¶ 4.11.13–14: SOW = how overall wealth was generated; SOF = the activity that produces the funds for this relationship — information should be substantive.

¶¶ 4.11.15–17: depth of measures is risk-based.

¶ 4.9 / high-risk situations: senior-management approval + SOW/SOF or other mitigating measures.

¶¶ 5.1–5.3: ongoing monitoring; for high-risk customers, CDD review at least annually (or more frequently).

FAQ Q13: SOW is required in high-risk situations (including non-Hong Kong PEPs), not for every customer.