Wealth connect scheme launched to foster cross-border investment

The Chinese mainland, Hong Kong and Macao launched the first mutual market access mechanism for individual investors on Friday (Sept. 10), which is expected to facilitate the mutual access of financial markets in the Guangdong-Hong Kong-Macao Greater Bay Area and further opening-up of the nation.

Promulgated in conjunction with the authority's Mainland and Macao counterparts, the respective documents provide supervisory guidance for the financial industry to carry out the wealth management connect scheme in the Greater Bay Area.

On Friday, the online ceremony marking the launch of the cross-border Wealth Management Connect in the Guangdong-Hong Kong-Macao Greater Bay Area was held simultaneously on the Mainland and in HK and Macao via webcast.

HK Chief Executive Carrie Lam, Macao Chief Executive Ho Iat-seng, Guangdong Province Governor Ma Xingrui, People's Bank of China Deputy Governor Pan Gongsheng, and Huang Liuquan, deputy director of the Hong Kong and Macao Affairs Office of the State Council, attended the online ceremony.

Lam said that the Wealth Management Connect is a milestone in the financial development of the Greater Bay Area and an important measure that deepens and widens mutual access between the financial markets of the mainland and HK, which will further consolidate Hong Kong's role as the international financial center of our country.

The scheme, which comprises the Southbound Wealth Management Connect and the Northbound Wealth Management Connect, is a mutual market access mechanism for bay area individual investors.

Under the southbound link, residents of bay area Mainland cities can invest in eligible investment products distributed by banks in Hong Kong and Macau by opening designated investment accounts with these banks.

While for the northbound one, HK and Macau residents can invest in eligible wealth management products distributed by Mainland banks in the bay area by opening designated investment accounts with these banks.

There will be an aggregate quota of RMB 150 billion in each direction and an individual investor quota of RMB 1 million.

HK Monetary Authority Chief Executive Eddie Yue noted that individual investors in the three places will be able to invest conveniently in more diversified wealth management products across the boundary.

Apart from offering more investment options, the scheme also creates opportunities for the banking and wealth management industry. In addition, it will promote the cross-boundary circulation and use of the renminbi, further consolidating Hong Kong's role as the global hub for offshore renminbi.

At a press conference on Friday afternoon, Monetary Authority Deputy Chief Executive Edmond Lau said he expects banks to launch the cross-boundary financial products in October or November, following the promulgation of the implementation details.

"We need to take some time to vet the applications, and the banks also need to take some time to do their final preparations including testing," Lau added.