Financial authorities in China’s Greater Bay Area (GBA) have decided to further enhance the Wealth Management Connect scheme, which aims to deepen mutual market access between Guangdong, Hong Kong, and Macau.
The enhancements to the cross-boundary scheme include refining the eligibility criteria of investors to support more GBA residents to participate in the scheme, expanding the scope of participating institutions to include eligible securities firms, expanding the scope of eligible investment products, increasing the individual investor quota as appropriate, and further enhancing promotion and sales arrangements.
The decision was made by the People’s Bank of China, National Administration of Financial Regulation, China Securities Regulatory Commission, State Administration of Foreign Exchange, Hong Kong Monetary Authority, Securities and Futures Commission of Hong Kong, and Monetary Authority of Macao.
The financial regulators will revise and refine the relevant implementation details and operational guidance with a view to implementing the new measures as soon as practicable.
The scheme, launched in September 2021, will be enhanced continuously based on its operations, and the financial market connectivity in the GBA will be advanced in a prudent and orderly manner to support the development of the GBA, according to the regulators.
Welcoming the move, Hong Kong financial secretary Paul Chan says: “The enhancement measures will further enrich the investment options of GBA residents and promote mutual access of the financial markets of the three places, which is conducive for the industry to explore business opportunities in the GBA, and can further realize the potential of the Wealth Management Connect while enhancing Hong Kong's position as an international asset and management centre.”
Daniel Chan, head of GBA at HSBC, says the Wealth Management Connect scheme has continued to unleash the demand for cross-boundary wealth management services.
Particularly after the reopening of the border earlier this year, HSBC has seen a significant growth in account opening and investment via the scheme. In terms of preference of product type, southbound investors mainly put their money into fixed deposits, whereas northbound investors mainly choose low-to-medium risk investment products.
“We believe that by continuing to refine the eligibility criteria of investors, enhance promotion and sales arrangements, expand product type and increase the individual investor quota, the scheme will provide investors in the GBA greater convenience, choices, and flexibility to participate in cross-boundary investments, which are key to driving participation in the long run,” Chan says.
“As travel between Hong Kong and mainland China continues to increase, so does the demand for cross-border banking and financial services. Investors not only look for wealth accumulation, but also have strong awareness of health protection and well-being. The new trend will also create opportunities for the financial services industry,” he adds.