Investing.com -- HSBC Holdings, Standard Chartered, AIA Group and Prudential shares have fallen sharply on Thursday after a report said some banks have suspended opening Hong Kong accounts for mainland Chinese clients intended for overseas investments.

HSBC dropped more than 5% in London trading, while Standard Chartered fell as much as 7% and AIA slid 6.8% in its worst session since March. Prudential declined more than 8%.

The selling followed a South China Morning Post report that Bank of East Asia's Shanghai branch had suspended opening such accounts.

HSBC was also cited in the report, which said the bank warned that all funds deposited into investment accounts must comply with Hong Kong's regulatory requirements.

The restrictions are said to be part of a broader push by Hong Kong banks to tighten scrutiny of mainland Chinese clients opening savings and investment accounts, amid Beijing's crackdown on illegal cross-border capital flows.

Last month, China's securities regulator imposed more than $330 million in combined fines on three online brokers for operating on the mainland without a license.

The selloff extended beyond banks to insurers, as the clampdown is expected to weigh on companies like AIA and Prudential, which rely significantly on mainland Chinese visitors traveling to Hong Kong to purchase insurance products.