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June 30, 2020

China announces cross-border wealth management investment scheme

China has announced plans to introduce a pilot programme to enable cross-border investment in wealth management products (WMPs) between Hong Kong and Macau and neighbouring mainland Chinese cities.

The pilot scheme dubbed Wealth Management Connect will enable individuals in Hong Kong, Macau and nine cities in mainland China’s southern Guangdong province that constitute the Greater Bay Area to make wealth investments in each other’s jurisdictions.

The People’s Bank of China, Hong Kong Monetary Authority, and Monetary Authority of Macao will pilot the scheme with adjustable investment quotas.

The scheme has a southbound and a northbound component based on an investor’s residency.

“Under Southbound Wealth Management Connect, residents of the Mainland cities in the Greater Bay Area can invest in eligible investment products distributed by banks in Hong Kong and Macao by opening designated investment accounts with these banks; under Northbound Wealth Management Connect, residents of Hong Kong and Macao can invest in eligible wealth management products distributed by Mainland banks in the Greater Bay Area by opening designated investment accounts with these banks,” the regulators said.

Regulators in the Mainland, Hong Kong and Macao will be responsible for setting up mechanisms to tackle illicit activities in Wealth Management Connect.

Regulations on retail wealth management products applicable in the three places will govern the scheme.

The launch date and implementation details of the programme will be announced later.

 

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